A

PROJECT REPORT
ON

“Study on Indian Telecom Sector”

Submitted in partial fulfilment of the requirement for the award of

Degree of Master of Management Studies (MMS)
In Finance

Submitted By
Aakash Deepak Gawade
Roll no -19
(Masters in Management Studies 2023-24)

Under the Guidance of

Dr. Abhiraj Shivdas

University of Mumbai’s
Alkesh Dinesh Mody Institute for Financial and Management Studies

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 University of Mumbai’s
Alkesh Dinesh Mody Institute For Financial and
Management Studies

Certificate

I, Professor Dr. Abhiraj Shivdas hereby certify that Mr./Ms. Aakash Gawade, SYMMS
Student of Alkesh Dinesh Mody Institute for Financial and Management Studies, has
completed a project titled Mutual Fund as an Investment Option in the area of specialization
Finance for the academic year 2023-2024. The work of the student is original and the
information included in the project is true to the best of my knowledge.

MMS Coordinator Director

Prof Naina Salve Dr Smita Shukla

Internal Guide External Examiner

Dr. Abhiraj Shivdas

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 Declaration

I, Mr. Aakash Gawade SYMMS Student of Alkesh Dinesh Mody Institute for Financial
and Management Studies, hereby declare that I have completed the project titled Mutual
Fund as an Investment option during the academic year 2023-2024.

The report work is original and the information/data included in the report is true to the
best of my knowledge. Due credit is extended on the work of Literature/Secondary Survey
by endorsing it in the Bibliography as per prescribed format.

Aakash Deepak Gawade

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 Acknowledgement

First and foremost, I would like to express my deepest gratitude to Dr. Abhiraj Shivdas sir for
his valuable time and advice in the making of this project. I would like to express my gratitude
to my mentor and every person who extended his guidance and support for bringing out this
report in the best possible way.

I also like to acknowledge the infrastructural support provided by the institute. I also take this
opportunity to express my sincere gratitude to the library staff that has provided me right
information and study material at the right time

About my Project, I would like to thank each one who offered help, guideline, and support
whenever required.

Aakash Gawade
MMS Finance 2022-2024

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Table of Content

Sr No Page No
1 Introduction 8
2 Indian Telecom Authorities 10
3 Telecommunications Laws and Regulations 14
4 Telecom Services/Licenses and Infrastructure in India 20
5 Spectrum Management 28
6 Industry Trends 33
7 Competition Issues 42
8 Telecom companies in India 52
9 Market size 55
10 Investment and Major Development 56
11 Government Initiatives 58
12 Electromagnetic Field Overview 62
13 5G Developments 65
14 Covid -19 Impact on Telecommunication Industry 66
15 Digital Ecosystem is the way Forward 69
16 Providing and Developing 5G Experience 72
17 Market Overview 74
18 Strategies Adopted 86
19 National Digital Communication policy 92
20 Opportunities across segment 95
21 Analysis of Survey 97
22 Statements of Study and Limitation 102
23 conclusion 103
24 Glossary 104
25 References 105

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 Sr No Page No
1 Indian Telecom Authorities 10
2 ICRIER’S Calculation 39
3 Telecom Operators 52
4 Defunct Operators 53
5 Telephone Subscribers 75
6 Wireless Subscriber 76
7 Broadband Service 77
8 Growth of Internet Service User 78
9 Total Wireless Data Usage 79
10 Foreign Investment Flowing’s 93
11 Occupation of person 97
12 Users using the service providers 98
13 Type of Connection by user 98
14 Are you satisfied by Your Current service Provider? 99
15 Are you satisfied by Network coverage in your area? 99
16 Are you Satisfied with VAS subscription provided by your Service 100
provider?
17 Are you satisfied with additional benefits by your service provider? 100
18 Are you satisfied with charges charged by your service provider as 100
compared with another operator?
19 Are you satisfied with customer care services provided by your 101
service provider?
20 Are you satisfied by Network coverage Outside your Area? 101
21 Rate your overall satisfaction about your service provider? 101
List of Pictures, Table and Diagram

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 Executive Summary

Globally, the Telecom industry has been substantial transformation over the last 5 years.
While voice revenue saturated data traffic as exploded driven by availability of infrastructure
devices and content. this data opportunity however has resulted in associated new challenge
for operators and regulators. data traffic economist till needs the right balance to justify
substantial investment required in spectrum and infrastructure. in edition emergence of over
the top 40 players is transforming the Telecom. Now it has turned to be counted by fingers in
a single hand.

OTT players return to undermine operators voice and messaging revenues but also offer new
opportunities in media and cloud as new ecosystem development. After a period of rapid
growth Indian operator also face challenges now as growth of voice revenues has slowed down
while the data and 3G opportunity is materialising slower than anticipated. The Indian economy
has undergone Rapid transformation in the past 2 decade and the telecom sector has contributed
significantly to growth. From under 4% in 2001 tele density at city had reach 77.04% in
September 2012 leading to substantial economic and social benefits for the country. While
urban voice penetration has reached 161.03% rural wastage at 40.36% and broadband at less
than 2% need to be substantially enhanced in the next wave of telecom growth. The National
Digital telecommunication policy will help to boost the telecom Infrastructure. The Executive
summary covers about Indian Telecom Authorities, Laws and Regulations, Licenses and
Infrastructure in India, Spectrum Management, Industry Trends, Market Size, Market
Competition, Telecom sector Issues,5G Development and many more related to the Indian
Telecom sector.

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Introduction

India is currently the world's second-largest telecommunications market, with 1.16 billion
subscribers, and has had rapid expansion over the last decade. According to a report developed
by the GSM Association (GSMA) in partnership with Boston Consulting Group, India's mobile
economy is fast increasing and will contribute significantly to the country's Gross Domestic
Product (GDP) (BCG). In 2019, India overtook the United States as the second-largest market
for app downloads. The government of India's liberal and reformist policies, as well as strong
consumer demand, have aided in the rapid growth of the Indian telecom sector. The
government has provided easy market access to telecom equipment as well as a fair and
proactive regulatory environment to ensure that consumers may get telecom services at
reasonable pricing. Foreign Direct Investment (FDI) norms have been deregulated, making the
industry one of the fastest expanding and top five job creators in the country.

In January 2020, the Competition Commission of India (‘the Commission’) launched a Market
Study on the Telecom Sector in India (‘the study’). This study is a fact-finding exercise, tracing
the recent evolution of the industry, analysing threats and challenges to competition,
identifying strengths and opportunities in the wake of technological innovations and
recommends measures that will secure the growth of a dynamic telecom industry in the future.
The objective of the study is to assess the level of concentration and competition in the telecom
sector, highlight changes in competition strategies, analyse the dynamics of competition and
cooperation between telecom services and related industries such as over-the-top (OTT)
services, tower companies and infrastructure providers, and finally, examine regulations and
policy developments from a competition standpoint.

To understand this important aspect, we need to understand the role played by Telecom
Industry in India. Also, Telecommunications is one of India's fastest-growing businesses.
Telecom services have long been acknowledged as a vital instrument for a country's
socioeconomic development, and telecom infrastructure is now considered a critical
component in achieving India's socioeconomic goals. Since the beginning of liberalisation with
New Telecom, the Indian telecom sector has come a long way.

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Governmental policy (1999). In recent years, the telecom business has experienced exponential
expansion, particularly in the wireless category. Telecom has a long history. It has evolved as
a basic infrastructure, such as power, roads, and water, and has also become one of the most
important components of economic growth. Growth is necessary for the country's overall
socioeconomic progress (Department of Telecom).

India has witnessed a transformation from an agriculture-based economy to a knowledge-based

economy. This phenomenal growth in the heterogeneous service sector in India has been so
rapid that today the country stands at number five in terms of tertiary sector output. The growth
in this sector is much higher than that in the agricultural or the manufacturing sectors. Services,
which is the fastest growing sector in India has led to the simultaneous growth in GDP,
employment generation, trade and investment. In statistical terms, India's service sector
contributes about 60 per cent of the country ‘s gross domestic product (GDP), almost 35 per
cent of employment, a quarter of the total trade and over half of the foreign investment inflows.
The growth in the service sector had picked in mid-80‘s and had catapulted in the 1990‘s. The
main reason for such growth in the service sector in India is liberalization and the economic
reforms of the 1990s which have led to privatization and removal of FDI restrictions in the
sector. The main reasons for this trajectory growth are increase in per capita income, more
leisure time, greater life expectancy and increasing complexity of life, increasing complexity
of products and the increasing number of products, higher number of working women,
migration of people from rural to urban or semi-urban areas, cultural changes etc. Further,
technological advancement, availability of large pool of knowledge and highly skilled workers
have ushered the growth in the sector. The sector has become the backbone of the social and
economic development of the country. This sector covers a wide range of activities, such as
transportation, communication, research and consultancy, accounting, banking and insurance,
real estate, media, entertainment, tourism and hospitality, healthcare, education, retailing, IT
and ITES and BPO.

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Indian Telecom Authorities

I. Telecom Commission

The Telecom Commission is an inter-ministerial high level government body. The Commission
consists of a chairman, four full time members, who are ex-officio, Secretary to the
Government of India in the Department of Telecommunications and four part time members
who are the Secretaries to the Government of India of the concerned Departments. The essential
functions of the Telecom Commission are as under:

• policy formulation, licensing and coordination matters relating to telegraphs, telephones,

wireless, data, facsimile services and other similar forms of communications;

• international cooperation in matters connected with telecommunications;

• promotion of standardization, research and development in telecommunications;

• promotion of private investment in telecommunications;

• preparing the DoT budget and supervising its operations

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II. Department of Telecommunications (“DoT”)

As per the Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933 the
Central Government has the exclusive privilege of establishing, maintaining and working
telegraph and wireless telegraphy equipment and is the authority to grant licenses for such
activities. The Central Government acts through the DoT.

Some of the important functions of the DoT are as follows:

• licensing and regulation

• international cooperation in matters connected with telecommunications (such as

International Telecommunication Union (ITU), International Telecommunication Satellite

Organization (INTELSAT), etc;

• promotion of private investment in the Indian telecommunications sector;

• promotion of standardization, research and development in telecommunications.

III. Telecom Regulatory Authority of India (“TRAI”)

TRAI is an autonomous statutory body established under Telecom Regulatory Authority of

India Act, 1997 (“TRAI Act”) (discussed In Chapter IV of this paper). Liberalization made it
necessary for the Government to ensure that there is an independent communications regulator.

TRAI acts as an independent regulator of the telecommunications industry in the country.

One of the main objectives of TRAI is to provide a fair and transparent policy environment
which promotes a level playing field and facilitates fair competition amongst various telecom
players.

TRAI’s powers are recommendatory, mandatory, regulatory and judicial.

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The important recommendatory powers of TRAI are as follows:

• recommendations regarding the need and timing for introduction of new service providers

• recommendations pertaining to the grant of telecom licenses including their terms and
conditions

• recommend revocation of license for noncompliance of terms and conditions of license.

TRAI is the sole authority empowered to take binding decisions on fixation of tariffs for
provision of telecommunication services. Emphasis needs to be placed on the interplay between
the recommendatory powers of TRAI and the policy making powers of DoT. While the DoT
is the sole authority for licensing of all telecommunications services in India, it is mandatory
for the DoT to have before it TRAI’s recommendations with regard to matters over which
TRAI has recommendatory powers (mentioned above). Having done so, the DoT has the
discretion to either accept or reject the recommendations of TRAI. TRAI has over the years
come out with a number of recommendations; DoT has accepted some such recommendations
either wholly or partially or has rejected such recommendations.

IV. Telecom Disputes Settlement and Appellate Tribunal (“TDSAT”)

The TDSAT was established in 2000 under an amendment to the Telecom Regulatory
Authority of India Act, 1997. The TDSAT has been vested with exclusive powers to adjudicate
any dispute between:

• the licensor (DoT) and a licensee;

• service providers; and

• service providers and groups of customers.

Any appeal from the decision of the TDSAT can be filed only with the Supreme Court of India
which is the apex court of the country.

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V. Wireless Planning and Co-ordination Wing (“WPC”)

The WPC was created in 1952 and is a wing of the DoT which is responsible for Frequency
Spectrum Management, including licensing of wireless stations and caters to the needs of all
wireless users (Government and Private) in India. It exercises the statutory functions of the
Central Government and issues licenses to establish, maintain and operate wireless stations.

WPC is divided into

(i) Licensing and Regulation (LR),

(ii) New Technology Group (NTG) and

(iii)Standing Advisory Committee on Radio Frequency

Allocation (SACFA).

The WPC is also the central agency for the purpose of representing India and to adhere to
India’s commitments at the International Telecommunication Union (“ITU”), Asia-Pacific
Tele community (“APT”) and other organizations that India is a member or signatory of. The
WPC is headed by the Wireless Advisor to the Government of India.

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Telecommunications Laws and Regulations

I. The Indian Telegraph Act, 1885

This Act is one of the oldest legislations still in effect in India and is an Act to amend the law

relating to telegraphs in India. Some of the salient features of this Act are:

• it empowers the Government of India to take control of the existing telegraph lines and lay

down the necessary infrastructure for further expansion of telecommunications in India.

• it authorizes the Government of India to grant telecom licenses on such conditions and in
consideration of such payments as it thinks fit, to any person to establish, maintain, work a
telegraph within any part of India.

• it authorizes the Government of India to take possession of licensed telegraphs and to order

interception of messages on the occurrence of any public emergency or in the interest of public
safety.

• any dispute concerning a telegraphic appliance/ apparatus/ line between the telegraph
authority and a licensee (for whose benefit the line, appliance or apparatus is, or has been
provided) shall be determined by arbitration by an arbitrator appointed by the Central
Government.

We would like to place emphasis on the power bestowed on the Government to grant licenses
to private bodies to provide telecommunication services in India on conditions it deems fit.
This power is in fact a provision of the exclusive privilege granted by the Indian Telegraph
Act, 1885 to provide telecommunications services in India. In this respect it is interesting to
note the observations made by the Supreme Court in the case of Delhi Science Forum v Union
of India: “Central Government is expected to put such conditions while granting licences,
which shall safeguard the public interest and the interest of the nation. Such conditions should
be commensurate with the obligations that flow while parting with the privilege which has been
exclusively vested in the Central Government by the Act”.

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It is also relevant to note that though the provision pertaining to dispute resolution through
arbitration is well settled in law, there have been instances where the courts/ other judicial
bodies have assumed jurisdiction over matters which should be settled by arbitration under the
provisions of the Indian Telegraph Act, 1885. In the case of General Manager, Telecom vs M.
Krishna and a dispute arose regarding the non-payment of bills by the respondent due to which
the telephone connection of the respondent was disconnected. The respondent filed a complaint
before the District Consumer Disputes Redressal Forum, Kozhikode, which allowed the
complaint and directed the appellant to reconnect the telephone and pay compensation. A writ
filed by the appellant in the High Court of Kerala challenging the jurisdiction of the consumer
forum was dismissed. The appellant then came before the Supreme Court by way of special
leave. The Supreme Court held that as there is a special remedy by way of arbitration provided
in the Indian Telegraph Act, and the remedy under the Consumer Protection Act, is by
implication barred. It is well settled that a special law overrides a general law. Accordingly,
the Supreme Court set aside the order of the Kerala High Court as well as the order of the
District Consumer Forum.

II. The Indian Wireless Telegraphy Act, 1933

This Act was enacted to regulate the possession of wireless telegraphy apparatus. According
to this Act, the possession of wireless telegraphy apparatus by any person can only be allowed
in accordance with a license issued by the telecom authority. Further, the Act also levies
penalties if any wireless telegraphy apparatus is held without a valid license.

III. The Telecom Regulatory Authority of India Act, 1997

The Telecom Regulatory Authority of India Act, 1997 enabled the establishment of the TRAI.
The role and functions of the TRAI have already been discussed in above. Interestingly, the
1997 Act empowered the TRAI with quasi-judicial authority to adjudicate upon and settle
telecom disputes. Later this Act was amended by the Telecom Regulatory Authority of India
(Amendment) Act, 2000 to bring in better clarity and distinction between the regulatory and
recommendatory functions of TRAI.

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Further, the 2000 amendment served a very important purpose in completely differentiating the
judicial functions of TRAI by setting up of the TDSAT. The jurisdiction of civil courts has
been expressly barred in cases where the TDSAT has jurisdiction.

IV. The Information Technology Act, 2000

In 2000, the Indian Parliament passed the Information Technology Act, 2000 which was
amended in 2008 (“ITA”). The amendment provided additional focus on information security
as well as added several new sections on offences including cyber terrorism and data protection.
The ITA provides for penalties for various offences such as cybercrimes, various e-commerce
frauds like cheating by impersonation and pornography. Though the ITA was not enacted to
directly apply to the telecom industry, it is a fact that the information technology sector and the
telecom sector are closely linked and the 2008 amendments have in fact explicitly made the
ITA applicable to the telecom industry. Further, through the 2008 amendments a new section
has been inserted which defines “communication device” as cell phones, personal digital
assistance or combination of both or any other device used to communicate, send or transmit
any text video, audio or image. This revised definition clearly brings the telecom sector within
the ambit of the ITA.

We discuss below some of the important provisions of the ITA which are relevant for the
telecom industry.

A. Monitoring

Section 69-B of the ITA gives the Government the right to authorize any of its agencies to
monitor and collect traffic data or information generated, transmitted, received or stored in any
computer resource. By virtue of the definition of ‘computer resource’, this section would
include within its ambit cell phones along with all the servers and other data processing systems
which are used by telecom operators. Therefore, telecom operators will need to comply with
directions for monitoring and collection of data in the interest of cyber security issued by the
Secretary, Department of Information Technology or any other such officer as may be notified
by the Government.

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B. Intermediaries

As per the ITA, an intermediary (which by definition includes a telecom service provider) is
liable for any offence under the ITA. Under Section 79 of the ITA, an intermediary is exempt
from liability in relation to any third-party information or communication link, provided:

i. The role of the intermediary is limited to providing access to a communication system over
which third party information is transmitted or temporarily stored; or

ii. The intermediary does not initiate, select the recipient of or select / modify the information

in the transmission; and

iii. The intermediary observes due diligence while discharging his duties.

Notwithstanding the above qualifications, Section 79 further goes on to provide that

irrespective of the exemptions provided above and irrespective of the exercise of due diligence,
an intermediary would still be liable where:

ii. The intermediary has conspired, aided, induced or abetted in any unlawful activity; or

iii. The intermediary upon obtaining knowledge or upon being notified fails to expeditiously

remove or disable access to any information, data or communication link controlled by the

Intermediary which is being used to commit an unlawful act.

The essential element which needs to be proved in order to pin liability on an intermediary is

control. The basic premise is that an intermediary, in the ordinary course of business, is merely
acting as a conduit and is not in a position to exercise control over any material or information
which is transmitted through its platform unless required to do so under the provisions of the
ITA The DoT, introduced certain rules in exercise of powers conferred under the ITA. These
rules will act as enablers to particular sections of the ITA.

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One such rule is the Information Technology (Intermediaries guidelines) Rules, 2011. As per
the rules, the intermediary has to observe the necessary due diligence while discharging his
duties which include publishing rules and regulations, privacy policy and user agreement.

Such rules and regulations, etc shall inform the users of computer resource not to host, display,
upload, modify, publish, transmit, update or share any information, inter alia, that:

• belongs to another person and to which the user does not have any right to.

• is grossly harmful, harassing, blasphemous, defamatory, obscene, pornographic, libellous,

invasive of another’s privacy, disparaging, relating or encouraging money laundering or
gambling, etc or otherwise unlawful in any manner whatever.

• harm minors in any way.

• infringes any intellectual property right or other proprietary rights.

• violates any law for the time being in force, etc.

The following actions by an intermediary shall not amount to hosting, publishing, editing or
storing of any such information:

• temporary storage of information automatically within the computer resource as an intrinsic

feature of such computer resource, involving no exercise of any human editorial control, for
onward transmission or communication to another computer resource.

• removal of access to any information, data or communication link by an intermediary after

such information, data or communication link comes to the actual knowledge of a person
authorized by the intermediary pursuant to any order or direction as per the provisions of the
ITA.

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• The intermediary upon obtaining knowledge by itself or been brought to actual knowledge
by an affected person in writing or through email signed with electronic signature about any
such information as mentioned in aforesaid. point under this Rule, shall act within thirty-six
hours and where applicable, work with user or owner of such information to disable such
information that is in contravention of the said aforesaid point. Further the intermediary shall
preserve such information and associated records for at least ninety days for investigation
purposes.

• The intermediary shall inform its users that in case of non-compliance with rules and
regulations, etc, the intermediary has the right to terminate access or usage rights of the users
to the computer resource of Intermediary and remove non-compliant information.

• The intermediary shall provide information / assistance to Government agencies who are
lawfully authorized for investigative, protective, cyber security activity. The intermediary shall
report cyber security incidents and also share cyber security incidents related information with
the Government agency.

• The intermediary shall take all reasonable measures to secure its computer resource and
information contained therein following the reasonable security practices and procedures as
prescribed in the Information Technology. (Reasonable security practices and procedures and
believe that the introduction of this rule seems to have been introduced due to the increased
litigation against sensitive personal information) Rules,2011.

• The intermediary shall publish on its website the name and details of the grievance officer as
well as mechanism by which users or any victim who suffers as a result of access or usage of
computer resource by any person can notify their complaints against such access or usage. Such
grievance officer shall redress the complaints within one month from the date of receipt of
complaint. I intermediaries who were accused as parties / co-accused in cases of unlawful or
illegal conduct by end users.

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Telecom Services / Licenses and Infrastructure in India

There have been some important regulatory changes which were introduced post liberalization
which have provided an immense boost to development of this sector. These regulatory
changes by and large trace their roots to the objectives and vision set out by the Government
in NTP.

I. Universal Service Obligations

It is an accepted fact that improved rural penetration is a key priority area for most developing
countries. The concept of Universal Service Obligation (“USO”) has been mooted by many
developing countries and is grounded on the principle that effective means of communication
is a must for economic and social development. NTP envisaged the provision of basic
telecommunications services to all at affordable rates. Keeping in line with NTP and the
recommendations of the Telecom Regulatory Authority of India on the issues relating to the
Universal Service Obligation the Universal Service Support Policy was framed and came into
effect from April 2002. The Indian Telegraph (Amendment) Act, 2003 gave statutory status to
the Universal Service Obligation Fund (“USOF”). USOF is used to subsidise developments in
the telecom sector in the rural areas such as:

• increasing wireless network;

• providing public access through public or community phones;

• providing individual household telephones.

The resources for meeting the USOF are to be generated through a Universal Service Levy
(“USL”), which would be a percentage of the revenue earned by the operators under various
licenses. The USL presently is 5% of the Adjusted Gross Revenue earned by all operators
except pure value-added services providers like voice mail and e-mail.

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II. Interconnection

India today has a plurality of service providers and service networks. In such a situation,
efficient interconnection between a variety of access networks (such as fixed, mobile, national
long distance and international long distance) has to interconnect to make national and
international connectivity possible. In 2003 TRAI implemented the Telecommunications
Interconnection Usage Charges Regulation to fix terms and conditions of interconnectivity
between service providers and to regulate arrangements among service providers for sharing
their revenue derived from provision of telecommunication services.

III. Unified License

Further to NTP 2012, the DoT introduced the much awaited and much delayed Unified License
in August 2013. The Unified License paves the way for the implementation of DoT’s One
Nation – One License plan by consolidating license terms for different telecom services under
the ambit of one license, i.e., the Unified License. The Unified License replaces the old regime
of a telecom operator applying for separate licenses for separate services proposed to be offered
by bringing all the major telecom services under one license. The Unified License includes
within its ambit the following services:

• Access Service (Land Line Telephony Service along with Mobile Phone Telephony Service);

• Internet Service;

• National Long-Distance Service (“NLD Service”);

• International Long-Distance Service (“ILD Service”);

• Global Mobile Personal Communication by Satellite Service (“GMPCS Service”);

• Public Mobile Radio Trunking Service (“PMRTS Service”);

• Commercial Very Small Aperture Terminal Closed User Group (“Commercial VSAT CUG

Service”);

• INSAT Mobile Satellite System-Reporting Service (“INSAT MSS-R Service”); and

• Resale of International Private Leased Circuit Service (“Resale of IPLC Service”).

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The Unified License is a sort of umbrella document which all companies seeking to provide
telecom services will need to obtain. Apart from this, the company would also need to obtain
separate authorization from the DoT for specific services which the company wishes to
provide. One company can have only one Unified License, but the same company can apply
for authorization for more than one service and / or service area subject to fulfilment of all the
conditions of entry, simultaneously or separately at different times. At the time of applying for
Unified License, the applicant has to apply for authorization of at least one service that is listed
in the Unified License. The Unified License shall be issued on a nonexclusive basis for a period
of 20 years. The license may be renewed by the DoT for an additional period of 10 years at a
time upon request of the service provider, if made during the 19th year of the license period.
The Unified License covers a variety of services for which authorizations can be obtained. We
have discussed two of main services being covered by the Unified License; Access Service and
Internet Services

A. Access Services

Access Service providers can provide, within their area of operation, wireline (basic) as well
as wireless (cellular) services in a service area. Access Service providers have also been
permitted to provide internet telephony, internet services including IPTV, broadband services
and triple play i.e., voice, video and data. Importantly, Access Service is the only authorization
which is permitted to provide full-fledged Internet Telephony, i.e., they are permitted to
interconnect Internet Telephony network with the PSTN network.

In order to provide the above-mentioned services, licensees will have to separately acquire
spectrum once a license has been acquired, rather than spectrum being bundled with the license
as was the norm under the erstwhile licensing regime. Existing UAS Licensees are permitted
to migrate to Unified License regime. The service providers migrating to Unified License will
continue to provide wireless services in already allocated/ contracted spectrum and no
additional spectrum will be allotted under the migration process. Access Service providers are
required to pay a certain percentage of Adjusted Gross Revenue (“AGR”) as license fee apart
from paying spectrum charges. Specifically for those entities holding spectrum, the Unified
License has introduced the concept of presumptive AGR which places a premium on spectrum
even where the spectrum holder does not utilize the spectrum made available to them.

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A spectrum holder is required to pay license fees in the form of a percentage of notional
revenues or a percentage of the actual revenues, whichever is higher. Notional revenue which
is essentially a minimum amount of revenue for this purpose will be calculated in accordance
with the relevant provisions of the Notice Inviting Application document of the auction of
spectrum or conditions of spectrum allotment depending on the service and service area.
Therefore, unlike the previous regime whereby license fee was determined on the basis of
revenue generated by an operator, spectrum holders will now have to pay a minimum
predetermined percentage as license fee or actual AGR or the minimum license fee whichever
is higher.

B. Internet Service

Licenses (ISP) ISP licensees are primarily allowed to provide services such as internet access
(through any method including IPTV) and internet telephony (Which is a service to process
and carry voice signals offered through the internet by the use of personal computers (“PC”)
or internet protocol-based equipment).

Currently the ISP license allows limited internet telephony by permitting connections between
the following:

• PC to PC (within or outside India).

• PC / a device / Adapter conforming to standard of any international agencies like ITU or IETF

etc in India to PSTN/PLMN abroad.

• Any device / Adapter conforming to standards of international agencies like ITU, IETF etc.
connected to ISP node with static IP address to similar device / Adapter within or outside India.
Thus, ISP Licensees offering Internet Telephony are not allowed to interconnect Internet
Telephony network with the PSTN network. Further, ISP Licensees are not permitted to offer
Virtual Private Network (“VPN”) / Closed User Group services to its subscribers.

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IV. Mobile Number Portability (“MNP”)

MNP allows mobile subscribers to retain their existing telephone numbers when they switch
from one telecom operator to another irrespective of mobile technology. India has long felt the
need for MNP. The TRAI introduced the Telecommunications Mobile Number Portability
Regulations, 2009 in September 2009. As per the regulations, the subscribers would be allowed
to retain their mobile number while moving from (within the same service circle):

• one access provider to another irrespective of the mobile technology / platform; or

• one cellular mobile technology to another of the same access provider.

Thus, effectively a subscriber can move from a CDMA (Currently only GSM Services are
present) service provider to a GSM service provider in a seamless manner. Nevertheless, a big
drawback of the current MNP regime is that it is restricted to intra-circle transfers and prohibits
porting of a number from one circle to another.

However, the Government seems to have recognized this need, considering that one of the
objectives of the NTP 2012 were to achieve One Nation - Full Mobile Number Portability.
News reports suggest that the TRAI has suggested that pan-India and it has been achieved.

MNP would mean that subscribers can use the same number while moving from one mobile
circle to another, regardless of the service provider. India is one of the world’s fastest growing
telecom markets and it continues to be amongst the world’s lowest telecom tariff destinations.
As such the implementation of MNP will ensure that every telecom mobile service provider
offers mobile number portability to all its subscribers both post-paid and pre-paid on a non-
discriminatory basis. The telecom operators on their part, would have to incur huge expenses
by way of capital expenditure and operational expenses in order to effectuate and operationalize
MNP. With the Indian tariff structure already at the lowest in the world, the revenues of the
telecom operators are likely to be affected with the implementation of MNP with subscribers
having the freedom to migrate to better service providers. This in turn is likely to compel the
telecom service providers to improve the quality of their service to avoid losing subscribers.
This can be seen as maturing element of the Indian telecom industry and a natural step for the
industry to go forward.

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V. Anti – Spamming Regulations

The Telecom Commercial Communications Customer Preference Regulations, 2010 (“SMS

Regulations”) have completely come into force from September 27, 2011 and prohibit
Unsolicited Commercial Communications (“UCC”) and in turn require all telemarketers to
register under the SMS Regulations. The SMS Regulations have mandated the creation of a
National Customer Preference Register, a national database with a list of the telephone numbers
of all subscribers who have registered their preferences regarding receipt of commercial
communications. Subscribers have been given the option of indicating their preference by
registering either under the fully blocked category or the partially blocked category.

In the fully blocked category, a subscriber opts not to receive any type of commercial
communication, while the partially blocked category enables subscribers to receive
commercial communications only in the categories they have chosen. Subscribers under the
partially blocked scheme may choose from a selection of categories including: banking,
insurance, financial products and credit cards; real estate; education; health; consumer goods
and automobiles; communication, broadcasting and entertainment; IT; and tourism.

However, transactional messages, i.e., messages that represent a transaction undertaken by the
subscriber have been exempt from the purview of these regulations. After the much-litigated
cap of 200 messages per day per sim, the TRAI introduced a rule whereby any person, other
than a registered telemarketer or an entity sending transactional messages, which sends more
than one hundred SMS per day per SIM will have to pay an additional charge over the regular
applicable SMS rates. Thus, while consumers have been allowed to send any number of
messages, the TRAI has tried to de – incentivize unregistered telemarketers from using normal
SIM Cards by levying an additional charge for more than 100 messages per day per sim.

25
VI. Audiotext / Voicemail / Ums License

This license is a notable exclusion from the realm of the Unified License., thus a person
desirous of providing such services, would need to obtain a separate Audiotext / Voicemail /
UMS license before providing these services. While the Audiotext / Voicemail / UMS license
does not define the services to be provided under this license, however, it is understood to
include the authorization to provide, voicemail services or call conferencing services or unified
messaging services. With 100% foreign investment being permitted for this license, an
applicant can provide the aforementioned services upon obtaining the requisite ‘Audiotext /
Voicemail / UMS’ license from with the DoT. However, it is pertinent to note that a prerequisite
of obtaining a UMS license is having an ISP Authorization under the Unified License.

In my view it will make technical and operational sense to include this license within the scope
of the Unified License.

VII. Other Services Providers (OSP)

Other Service Providers (OSPs) do not require a specific license; however, a registration
process is required to be fulfilled subject to fulfilling certain criteria. The most important of
which is the Other Service Providers registration.

Call centres (international and domestic), BPOs, Network Operation Centres, Vehicle Tracking

Systems, services with respect to tele-banking, tele-medicine, tele-education are allowed to

operate (with 100% FDI) upon registration as “Other Service Provider” or “OSP” with the
DoT. These OSP’s operate the service using the telecom infrastructure provided by licensed
telecom service providers. There are various security related obligations imposed on various
telecom licensees (as discussed later in this paper). As security related conditions are applicable
to all licensed telecom service providers, the security conditions shall not be separately
enforced on OSPs. An interesting development in the OSP registration policy is the amendment
that was announced in August 5, 2008 which officially recognized the “work from home”
provided certain financial guarantees are provided.

26
Viii) Government Departments to Grant Preferential Market Access to Indian Telecom

Equipment Manufacturers

Following the lead of Department of Information Technology, the DoT on October 5, 2012
issued a notification granting preferential market access to domestic telecom manufacturers.

The notification, mandates that domestically manufactured telecom products must be given
preference, when the same is being procured by Government departments and agencies (with
the exception of the Ministry of Defence which has been exempted) for their own use and not
with a view to commercially resell or with a view to use in the production of goods for
commercial sale. It is proposed that the policy will be in force for a period of 10 years from the
date of its notification in the official gazette.

Each Government ministry or department will now have to procure minimum percentage of
their telecom product requirement fulfilling minimum value addition prescribed against each
item. The main object of the government behind this notification appears to be to protect Indian

security interest as well as to give an impetus to manufacturing of high-quality domestic

products in India thus, lowering the effective cost of the products and elevating local
innovation. Foreign vendors have voiced concerns on this proposal and it may be challenged
as a non-tariff barrier for market access.

27
Spectrum Management

Spectrum refers to the use of radio waves or frequencies in telecommunications. Since

spectrum is the cornerstone of telecom services worldwide and is by its very nature a scare
resource, spectrum management has become very important in recent times. In this chapter we
discuss some of the important aspects of spectrum management in India as well as
internationally.

I. Ownership of Spectrum

It was once believed that spectrum is the property of the government, and hence the government
could use it in a manner that suited it and that the government had exclusive rights to regulate
and allocate spectrum. But post 1995 this belief has changed. This has been possible due to a
historic judgment given by the Hon’ble Supreme Court of India in 1995 in the case of Secretary,
Ministry of Information and Broadcasting, Govt. of India v. Cricket Association of Bengal
which decided that spectrum is actually public property. This judgment has changed the
perception of ownership of spectrum in India and the way the government handles and manages
spectrum in today’s scenario. Specifically, the Supreme Court in the aforementioned case held
as follows:

There is no doubt that since the airwaves/ frequencies are a public property and are also limited,
they have to be used in the best interest of the society and this can be done either by a central
authority by establishing its own broadcasting network or regulating the grant of licences to
other agencies, including the private agencies.

This view of the Supreme Court was further propounded by the Supreme Court in the case of
Reliance Natural Resources Limited v. Reliance Industries Ltd whereby it was observed that
natural resources are vested with the Government as a matter of trust in the name of the people
of India, thus it is the solemn duty of the State to protect the national interest and natural
resources must always be used in the interests of the country and not private interests.

28
Most recently, the Supreme Court in the case of Centre for Public Interest Litigation and Or’s.
Vs. Union of India (UOI) held that “In conclusion, we hold that the State is the legal owner of
the natural resources as a trustee of the people and although it is empowered to distribute the
same, the process of distribution must be guided by the constitutional principles including the
doctrine of equality and larger public good.” India is not the only country to hold the view that
the spectrum is public property. Most of the developed countries like USA, Canada, UK, etc,
hold the same view that spectrum is public property and the government is only the caretaker
of this public property.

A. Management of Spectrum in India

Spectrum management is the combination of administrative and technical procedures with

legal connotations necessary to ensure efficient operation of radio communication services

without causing harmful interference. There are two levels at which spectrum is managed:

1. National

2. International

i. International Management of Spectrum

Humans have divided territory into countries and continents, but spectrum knows no such
bounds. Thus, there has to be international co-operation in the management of spectrum. There
are various international organizations for the purpose of harmonizing the use of spectrum
between countries. The organizations that are addressed are ITU and APT. The role played by
these organizations have already been discussed earlier.

29
ii. National Management of Spectrum

Every country has different agencies managing the spectrum of that particular country. It is
also, a very important task as it involves an issue that affects almost the entire population of
that country, the business of that country and indeed the social structure, harmony and the unity
of that country. In the Indian context, the Indian Telegraph Act, 1885 and the Indian Wireless
Telegraphy Act, 1933 and Rules and Procedures made under these Acts provide the legal basis
for spectrum management.

II. Note on National Frequency

National Frequency Allocation Plan (“NFAP”) The NFAP is the basis on which spectrum
frequencies are allocated in India. The ITU issues the international frequency table for the
purpose of giving the member countries a basis on which they can formulate their own
frequency allocation plan. The NFAP is the frequency allocation plan of India. This plan clearly
allocates different frequency bands for different radiocommunication services. Although it
allocates frequency bands for certain services, it does not give ownership rights to those
services. NFAP-81 was in force till December 31, 1999 for commercial and other uses. NFAP-
81 was formulated for a time, when usage of frequency bands was primarily done by the
government agencies with some exploitation by private parties for their dedicated networks.
However, with the proliferation of new technologies in the country and the entry of the private
sector in the telecommunication field the government decided it was prudent to revise NFAP-
81. Accordingly, from January 1, 2000 the NFAP-2000 replaced NFAP-81 in order to better
manage the increased use of spectrum. Later NFAP 2008 which was made effective from April
1, 2009 replaced NFAP 2000. NFAP 2011 has been developed with special emphasis to
encourage /promote indigenous manufacturing / technologies by provisioning of small chunk
of spectrum in certain frequency band 25/ sub-bands in limited geographical area.

The WPC Wing of the DoT is now amidst reviewing / revising NFAP 2011 to come out with
the NFAP 2013 in line with the decisions taken in the World Radio communication Conference
– 2012 of the ITU.

30
The NFAP 2013 is not only expected to take into account the decisions of the World Radio
communication Conference and the NTP 2012 but also account for the introduction of new
technologies in the form of LTE, 3G and digitization of broadcasting (TV and Radio).

III. Standing Advisory Committee on Frequency Application (‘SACFA”)

SACFA is a wing of the DoT which gives approval for radio frequency (spectrum) used by
telecom service providers. Obtaining a telecom license is not enough for the operator to begin
rolling out the services; a no objection from SACFA is required. This involves a detailed
technical evaluation including field studies in order to determine inter alia possible aviation
hazards and interference (Electro Magnetic Interference (EMI)/Electro Magnetic Compatibility
(EMC)) to existing and proposed networks.

Functions of SACFA:

i. To recommend on major frequency allocation, issues requiring co-ordination amongst the

various wireless users in the country.

ii. To formulate/review the National Frequency Allocation Plans.

iii. To formulate national proposals for international conferences/ meetings and to coordinate

nationally all activities pertaining to the ITU, etc.

iv. To deal with frequency co-ordination problems referred to the committee by the
administrative Ministries/Departments.

v. To clear sites of all wireless installations in the country.

At present, spectrum is managed through WPC Wing, SACFA and NFAP, all of which have
already been discusses earlier.

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A. Auction of Spectrum

It should be noted that the government is bound to ensure that its licensing decisions are
rational, transparent and free from arbitrariness. The courts have time and again upheld this
principle of transparency. In the case of Delhi Science Forum v Union of India, the decision of
the government to invite tenders from non-governmental and private entities for license to
provide telecommunications services was challenged in a writ petition wherein it was
contended that the sensitive nature of telecommunications mandated that it should not be placed
in the hands of the private sector and any step in this direction would not only endanger the
national security of the country but would not serve the economic interest of the country. The
Supreme Court dismissed the writ and categorically held that the privatization policy adopted
by the government is a necessary consequence of liberalization and the grant of
telecommunications licenses to non-governmental organizations would greatly improve
telecom services. However, the Supreme Court also emphasized the procedures adopted for
such grant should be “reasonable, rational and in conformity with the conditions which have
been announced.” The Supreme Court of India in the case of Centre for Public Interest
Litigation Vs. Union of India (UOI) and concluded that spectrum was a natural resource and
national asset and belonged to the public at large. The Apex Court criticized the first come first
served policy of the government for distribution of 2G spectrum and held that a duly publicized
auction is the best way of disposing public property. Consequently, the Supreme Court
delivered an order against thirteen respondents holding that such respondents had been
favoured by the government and had been illegally granted telecom licenses. The Supreme
Court consequently issued an order cancelling telecom licenses granted in various service areas
for 2G spectrum. The Supreme Court also imposed financial penalties ranging from 50 lakhs
to 5 Crores on the grounds that such respondents had benefited at the cost of public exchequer
by a wholly arbitrary and unconstitutional decision taken by the DoT for grant of licenses and
spectrum. Further, the Court also ordered the re-auction of the spectrum that had been made
available due to the cancellation of the telecom licenses. Thus, going forward the disposal of
spectrum will only be done via a duly publicized auction.

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INDUSTRY TRENDS

A. Market Structure and Price-based Competition

India’s telecom sector is not only one of the largest but also among the fastest growing networks
in the world. The increase in subscriptions has been nothing short of dramatic, on occasions
touching 20 million in a month. In the first decade of the 21st century, subscribers grew at 33
per cent annually. Technological progress and an enabling policy regime combined to
transform the market, expand the network and produce a staggering growth. In 1999, when the
New Telecom Policy was announced, there were thirteen 2G technology-based private mobile
service providers. By 2019, exits and consolidation had reduced the number of operators to
eight. Today, telecom networks are the backbone of India’s digital economy with 4G
technology firmly in situ in all private networks. The country-wide lockdown due to COVID19
unambiguously established the centrality of communications in maintaining economic activity
and elevated its growth impacts. The sector’s contribution to India’s GDP is estimated to have
increased by 5 to 6 times during this time.

In September 2016, the market witnessed the disruptive entry of Reliance Jio in voice and data
services using 4G technology. Data prices saw an immediate decline from Rs. 180 per GB in
September 2016 to Rs. 160 per GB in December 2016 and a secular decline to Rs. 6.98 per GB
in 2019. While growth has been robust, price competition has squeezed the bottom line for
incumbent operators. To lower costs and improve survival, smaller players were acquired,
while big operators like Vodafone and Idea merged. The prevailing market structure validates
the empirical finding expressed as the rule of three, which predicts that mature markets
normally support three main competitors, others who survive, are limited to the fringes or a
niche. The three major private sector operators, namely Jio, Airtel and Vodafone-Idea own
almost 88.4 per cent of the market. As of April 2020, Reliance Jio has the highest market share
with respect to subscribers (33.3 per cent). Reliance Jio also held the highest share with respect
to adjusted gross revenue (32.2 per cent), as of March 2020.

33
As industry prices, measured by average revenue per user (ARPU) fell, consumption of both
voice minutes and GBs of data increased. The growth rates for data were substantially higher,
reflecting the low base. While Minutes of Use (MoU) increased at a CAGR of 12 per cent
between 2014 and 2019, data usage per subscriber per month increased at a CAGR of 76 per
cent during the same time.

Internationally, India offers the cheapest data compared at current market exchange rates.
Mobile data tariff published by UK-based cable.co.uk using 6,313 data plans across 230
countries estimates the price per GB for data in India to be USD 0.16. Even at Purchasing
Power Parity (PPP) exchange rates, the tariffs in India are lower than several other countries
including Brazil, Russia, China, Canada, EU and the US. For instance, the average cost of 1
GB data in PPP terms is USD 12.37 in USA, USD 23.39 in Russia, USD 41.45 in China, USD
14.35 in Canada and USD 7.86 in Brazil.

Competition was compelled to respond to the new tariff regime introduced by Reliance Jio,
initially as a promotional feature of their tariff plans. Revenue realisation for Airtel fell from
Rs. 0.22 per MB in June 2016 to Rs. 0.06 in June 2017. The corresponding numbers for
Vodafone and Idea were Rs. 0.26 per MB (June 2016) to Rs. 0.09 (June 2017) per MB and
from Rs. 0.21 per MB (June 2016) to Rs. 0.05 per MB (June 2017), respectively.

While low data tariffs became the hallmark of India’s mobile data revolution, most operators
grappled with high costs and technological upgradation. The late entrant Jio offered an all 4G
service at significantly lower tariffs. Others built 4G on top of legacy networks, playing catch
up. Meanwhile, saturation in markets is now forcing operators such as Airtel and VIL to offer
incentives for high-value recharges and for data activations in rural areas, thus narrowing the
digital divide in India. Currently, Vodafone-Idea accounts for the highest share of rural
subscribers; Reliance Jio is inching closer, with its bundled low-cost 4G Jio feature phone.

Incumbents are also focusing on customer retention in the premium post-paid category, who
are arguably less price-sensitive than the prepaid category; the ‘‘premiumisation’’ strategy of
Airtel and VIL reflected in their Platinum and REDX plans, respectively. However, these plans
offering higher speeds at higher prices have recently been legally challenged.

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B. Technology Evolution and Data Based Services.

Markets in which technology changes rapidly, late entrants could enjoy a ‘late mover
advantage’ because it provides an opportunity to leapfrog. While Reliance Jio’s network is all
4G, incumbents have to decide on how to manage and phase out legacy 2G and 3G networks.
Interestingly, the 3G that was launched relatively late in India in 2008 is among the most short-
lived technologies. With operators transitioning to 4G, 3G is being wound down faster than
2G. The reason to discontinue older technologies is based on the emerging availability of
spectral efficient technologies such as 4G. With 4G, voice and data are progressively becoming
technologically indistinguishable.

Spectrum is one of the most critical inputs for mobile communications and access to it bestows
competitive advantage to operators. Larger quantity of contiguous spectrum improves
operational efficiency. Spectrum liberalisation in 2016 enabled operators to efficiently allocate
spectrum bands across 2G, 3G and 4G services. This was especially beneficial for incumbent
operators who service a heterogeneous group of subscribers across different generations of
mobile technologies. At the same time, incumbents hold more dispersed bands of spectrum
than Reliance Jio (RJio). For example, Airtel holds spectrum in 800 MHz, 900 MHz, 1800
MHz, 2100 MHz, and 2300 MHz frequency bands, while RJio’s holdings are concentrated
within 800 MHz, 1800 MHz and 2300 MHz bands. The current spectrum holdings for Airtel,
VIL, RJio and BSNL across all circles and spectrum bands are 862.7 MHz, 931.7 MHz, 602.5
MHz, and 388.2 MHz, respectively.

In 2010, RJio purchased pan-India Broadband Wireless Access (BWA) spectrum (2300 MHz)
as part of its internet license. In 2012, a unified licensing regime was introduced that allowed
RJio to provide both voice and data services on the BWA spectrum, increasing its underlying
value. It was a material policy shift. When RJio launched 4G in 2016, 3G was less than 8 years
old in India, and a substantial number of 2G subscribers also existed on the network.
Meanwhile, Airtel, an incumbent operator, also purchased spectrum in the 2300 MHz band in
2010 but had only begun testing the market for 4G, as managing legacy networks and the
emerging 3G technology were immediate challenges at hand.

35
The need to manage multiple technologies added to the cost of doing business for incumbents.
According to Vodafone as of May 2020, its 2G, 3G and 4G subscribers were 19.08 million,
15.78 million and 97.27 million, respectively. The corresponding numbers for Airtel in April
2020 were 24.97 million, 2.95 million and 139.37 million, respectively. The mix of
technologies is likely to stick around for at least a few more years, impacting the competitive
strength of incumbent operators.

During the initial years following the liberalisation of the sector, spectrum came bundled with
the license that acted as an entry barrier. In 2010, spectrum in the 2100 MHz and 2300 MHz
bands was assigned for the first time through an online auction. The 2010 auction was
successful in that the entire spectrum put up for sale was acquired at prices that far exceeded
the reserve price. Since reserve prices for subsequent auctions were continuously indexed to
previous rounds, the price of spectrum remained high. Operators have paid upwards of Rs. 3.5
lakh crores across 6 auctions between 2010 and 2016. Consultations with experts revealed that
the spectrum costs in India are approximately 7.6 per cent of their aggregate revenue, making
them amongst the most expensive in the world, followed by Thailand at 7.3 per cent and
Bangladesh at 7 per cent. Besides, spectrum holding in India is also limited. The average
spectrum an Indian operator holds is 31 MHz compared to the global average of 50 MHz

C. Price and Non-Price Parameters of Competition

The combination of regulatory forbearance for retail tariffs and intense competition in the
market for subscribers obtained for India a characterisation of being the lowest priced telecom
market in the world. This moniker is not without a trade-off. While India is undoubtedly a
price-sensitive market and price elasticity of mobile services is known to be much higher than
most other countries, the quality of service has been a victim, with call drops finding mention
in the Parliament as well. RJio’s launch offer in September 2016 introduced unlimited data and
voice, video and messaging services along with a full bouquet of Jio applications and content
at a very low price. The shock to data prices followed by the downward revision of mobile
termination charges in 2017 from 14p per min to 6p per min adversely impacted the competitive
position of incumbent operators.

36
In submissions made to TRAI, Airtel reported cost per GB to be Rs. 30 while Vodafone
estimated it at Rs. 26.8 (excluding ROCE). The estimated realisation at Rs. 2.70 was thus below
cost. Even with sufficient margins of error, there seemed to be a need to increase prices, for
immediate industry viability and for longer term consumer interest.

An industry price hike inevitably ensued. Pre-paid tariffs were increased, by up to 50 per cent
by the three major private operators. Airtel and VIL revised their basic plans that offered both
voice and data from for Rs. 35 to Rs. 49, a 40 percent jump. VIL also increased tariffs by 50
per cent on some of its other popular plans. For instance, a Rs. 399 plan offering subscribers 1
GB per day for 84 days was revised to Rs. 500, offering 1.5 GB a day for a similar period. RJio,
on the other hand, introduced its All in One (AIO) plan which was priced 40 per cent higher
than its previous plans; however, the benefits offered were also increased. Similarly, some post-
paid plans by Airtel and VIL saw a 10 per cent hike. The tariff hike reduced the urgency of the
floor price proposal that incumbents had brought before TRAI in response to the unviable price
levels resulting from the disruptive pricing introduced by RJio.

As stated above, Quality of Service (QoS) received scant attention within the telecom
ecosystem in the initial years following liberalisation. Much of the focus of the sector regulator,
operators and consumers was on price and price-based competition. With the market moving
towards data-based applications and services, there is a noticeable change in the demand for
QoS. Stakeholder consultations revealed the importance of QoS. Open Signal, an independent
agency measuring mobile connectivity globally, reports that 4G availability has improved for
all operators in India. While Jio’s LTE network is placed ahead of the rest in 4G availability.
The October 2019 reporting by Open Signal shows that Airtel offered the best download and
video experience. A preference for better quality also underlines Airtel and VIL’s recent
strategy to charge higher for higher speeds.

37
Survey findings confirm customer preference for QoS. Consumers ranked network coverage
(rank 1) followed by customer service, tariff packaging and lower tariffs (rank 4) as the most
important factors for preference of a particular network. Jio subscribers were most satisfied
with their wireless connections, followed by Airtel and VIL subscribers. More specifically,
Airtel subscribers were satisfied with tariff offerings and internet speeds while Jio subscribers
ranked voice quality, lesser call drops and customer service as most satisfying. For VIL
subscribers, network coverage ranked on top. These responses suggest that competition has
moved away from a unidimensional focus on price.

Operators are also competing through their design of innovative tariff packages and product
bundling is reportedly an important competition parameter. The current combo offers include
voice, data and over-the-top (OTT) services. An analysis of tariff data available on the TRAI
website finds seven different categories of tariff products for prepaid subscribers and three
different categories for post-paid subscribers.

D. Vertical Convergence

The emergence of over-the-top (OTT) services in 2009 threw the industry's stable equilibrium
into disarray. While it is true that OTT services have made inroads into traditional revenue
sources for operators without having to bear the license and regulatory load, there is no simple
solution. On the one hand, OTT services that replace traditional SMS and voice put revenue
pressure on operators, but on the other hand, their existence widens the market and increases
data income. OTT services that are unlicensed and qualitatively different offer a wide range of
features that go beyond communication.

After the initial disruption, Telecom Service Providers (TSPs) have accepted the new business
reality that internet-based OTT applications and services bring revenue, more content and spur
investments in network upgradation. TSPs and OTT companies now have a symbiotic
relationship, as operators package OTT services to push more data over telecom pipes, and
OTT services benefit from telecom providers' enormous subscriber base.

38
As previously stated, OTT services are now frequently included in tariff packages, giving rise
to voice, video, and data, or 'triple play' services. Contractual arrangements between telcos and
Internet-based service providers have given way to various types of strategic deals. Reliance
Jio, for example, has invested in Eros, a video content provider, and Balaji Telefilms. Hot star
and Amazon, respectively, have signed content arrangements with Airtel and Vodafone.
Facebook just made an investment in Reliance Jio. Many TSPs have started creating their own
digital content for e.g., Jio Cinema, Mx Player etc.

E. Financial Distress of the Sector

High spectrum acquisition costs combined with network upgrade demands had raised the
industry's debt burden. The industry's financial difficulties were exacerbated by technological
innovation and tariff competition prompted by Reliance Jio's arrival, which resulted in a
historic drop in revenue between 2017 and 2019. The industry's average revenue dropped from
5.49 percent in 2012-2013 to 2.51 percent in 2015-2016, and then to -2.82 percent in 2018-
2019. The weighted average Return on Equity (ROE) projections for the industry fell from 7.46
percent in 2015-2016 to -7.59 percent in 2017-2018.

YEAR Average (%) Weighted Highest Revenue Lowest Revenue

Average (%) Growth in the year Growth in the
Year (%)
2012-13 5.49 10.28 56.63 -38.31
2013-14 9.59 8.67 45.56 -5.79
2014-15 12.68 13.25 37.10 -10.52
2015-16 2.51 2.50 14.46 -7.38
2016-17 -10.55 -7.20 5.35 -68.71
2017-18 -29.19 -14.15 -12.27 -75.63
2018-19 -2.82 20.35 92.67 -36.72

Source: ICRIER’S Calculation based on Financial Reports of the Operators.

39
Rising leverage is among the principal challenges facing the sector. The ICR for the industry
is considerably depressed due to the presence of heavily indebted operators. An ICR of less
than implies that the Earnings before Interest and Taxes (EBIT) are insufficient to cover
repayment of interest and taxes. Industry estimates since 2014-15 show a declining trend for
ICR, reflecting the industry’s general inability to service debt and pay taxes.

A negative Profit after Tax (PAT), implies that ROE is also negative for most operators for
several years since 2011-12. This presents difficulties for the long-term viability of telecom
businesses. Recent investments in RJio and the rights issued by Airtel and VIL reflect long-
term intent and are positive signals for the industry. By themselves, these are, however,
inadequate to address the sustainable future for the industry.

F. Way forward and launch of 5G

Globally, the transition from 4G to 5G is underway and gaining momentum. In fact, the 5G
revolution is happening faster than the transition to any previous access technology. Operators
around the world are investing in the spectrum and next-generation mobile network
infrastructure. The frontrunner in global 5G deployment, South Korea, had reached 12 million
5G subscribers in 2020 and 36 million—or 90 per cent penetration—by 2026.

For India, spectrum allocation will be key to the successful launch of 5G services. Based on
available information, the spectrum for 5G in India will be relatively more expensive than other
countries. The learning from India’s experience also suggests that the quantum of the spectrum
will also determine the quality of 5G offerings; scarcity increases costs and makes operations
inefficient.

40
5G technology standards, like all other communication technologies, are coordinated and
created globally. As a result, telecom operators do not have to worry about technology
availability. In order for 5G to succeed in India, it will need to develop a competitive market.
This will entail assuring spectrum assignment at a reasonable cost, while also balancing
revenue realisation and industrial sustainability. This will ensure that the capital market
continues to be interested in funding network upgrades and expansion, as well as spectrum
purchase. The current financial condition of the industry as a whole may result in an unequal
rate of 5G adoption by operators, with the most profitable ones likely to be first to market. In
case this scenario unfolds, it will have implications for the level of competition in the long-run.

41
COMPETITION ISSUES

Significant step was the unbundling of the spectrum from the license in 2012. Spectrum sharing
and trading, permitted in 2015, was the next step enabling harmonisation and efficient
utilisation of existing spectrum. Interconnection tariffs, net neutrality rules and mobile number
portability (MNP) are some of the explicit ex-ante regulations in the sector that shape
competition.

Over the last three years, the industry has been engaged in a price war, prompting calls for the
establishment of a price floor to deter predatory behaviour. Price floors are a tool in the
competition regulation toolbox that can be employed when an incumbent has disproportionate
market power and chooses to exploit it. A price limit regime, on the other hand, is often
employed to prevent a dominating incumbent from abusing its market position. Price caps were
popular in Indian telecom at first, but as competition became more robust and successful, the
regulator deferred to the market, relying on tariff reporting and monitoring to maintain and
nurture competition. In general, the presence of strong players is good for competition,
however, a heterogeneous market with a few weakened debt-ridden operators may be inimical
to it. The issues impacting industry competition are discussed in subsections below.

A. Price-based Competition and Value Destruction

Ex-ante competition analysis by TRAI relies heavily on the definition of Significant Market
Power (SMP). Only an entity with SMP can engage in conduct that is anticompetitive, is the
received wisdom. A new entrant with no presence in the relevant market is thus at once
precluded from such conduct. Reliance’s entry into telecom through Jio did not merit
regulatory attention despite its discounted pricing strategy. Based on TRAI’s definition of
SMP, Jio did not qualify as an entity with SMP and by definition ‘predatory’.

42
The incumbents' reactions to the tariff reduction were predicted. They matched the new tariffs
by making voice, which accounted for 70% of revenue, free, and data costs drop by over 85%.
The significant drop in pricing resulted in a number of exits, and industry income in 2018-19
was roughly identical to that about a decade ago. Meanwhile, the incumbents have petitioned
the Telecom Regulatory Authority of India (TRAI) to establish floor tariffs. Floor pricing had
never been part of the regulatory toolset in the 25 years since liberalization, so it was a
challenging requirement for TRAI to accept.

On this matter, the CCI advised TRAI to keep the forbearance regime in place. Floor prices
ensure telecom operators achieve a minimum profit, but they also risk becoming complacent
about their service offers, depriving the market of innovations that may make services more
inexpensive. Furthermore, in the expanding multi-sided market, pricing tactics are
complicated. Tariffs were eventually raised by almost 40% in December 2019.

Where there is technological convergence, bundling of services and pre-eminence of data, a

pure cost-based regime in form of fixing telecom retail price would be inadequate and, indeed,
undesirable. Telecom falls in the category of two-sided markets with service providers
operating as a platform using which content providers and subscribers connect. Subscribers are
better off with the content, and content providers are better off due to their expanded reach. In
multi-sided markets it is not the price of individual service(s) that has to be determined in a
market, it is the entire pricing structure of various sides of the market that operators compete
on. So, it is quite possible that some markets with very high elasticity may be zero priced but
monetisation from the inelastic market can compensate for below-cost pricing. Therefore,
certain value-added services can be priced above the marginal cost and certain baseline services
can be priced at or below marginal cost. Moreover, telecom operators may generate other
sources of revenue than user charges. For competition law assessment also, two-sided markets
raise a regulatory challenge because they do not fit neatly into the existing standard approaches
for assessing market definition and power. Their relative newness and almost complete absence
of precedent makes the regulators task much harder.

43
The overall welfare implications of such price shocks are hard to judge since they depend on
the relative weights attached to consumer and producer welfare and to the short versus the long
term. What is certain though is that weakened competition will delay access to new
technologies such as 5G. The extent of price and non-price competition among players will
vary over time and is likely to be a function of several elements such as nature of the market
rivalry, expected response from a rival following a competitive move and the like. While it is
difficult to generalise, as the market matures and as tariffs become similar across operators,
non-price parameters would begin to play an important role in driving competition.

B. Non-Price Based Competition

Factors in driving competition in the Indian telecom market, partly reflecting the maturing
nature of competition and in part the recognition that price competition has its intrinsic limits.
Even though the average consumer remains price sensitive, other factors such as QoS, data
speeds and bundled offerings are shown to influence consumer choice. Further, the increase in
wireless data subscribers from 281.5 million in 2014 to 664.8 million at the end of 2019 points
towards the shifting focus of competition from voice to data. Data has several more dimensions
than voice and has given rise to “bundled offerings’’ which include, inter alia, voice, data,
SMS, and content. Based on the stakeholder interactions and interviews with sectoral experts,
supported by secondary research, the study envisages that bundled offerings will drive
differentiation in the market. The dynamic nature of telecom market ensures that what is a
differentiator at one point in time becomes common at another.

With tremendous product parity in the telecom industry, retaining customers is a continuous
challenge. A pan-India mobile network and data packages are no longer the product or service
differentiators. Service bouquets are a likely choice to improve customer retention. For
instance, Bharti Airtel’s strategy is focused on “bundling”, “upgradation”, and
“premiumisation”. It recently launched “Airtel Thanks”, a programme which offers exclusive
benefits to its customers by linking subscriber ARPU to free rewards. Through this strategy, it
plans to tie-up with third party content producers along with variegated products, and services
and offer them as “bundled” offerings at zero-cost to subscribers. Bundled offerings also give
operators an opportunity to identify new ways of monetisation.

44
Reliance Jio has already made significant investments across the value chain. Jio’s Giga Fiber
is being developed as a comprehensive package for user customisation. Further industry pricing
is moving towards longer validity plans (70-90 days) and now may plans are of yearly basis
offered by majority of Service Providers. Bundled offerings coupled with longer validity plans
and timely discounts are likely to nudge consumers to stick.

Almost all stakeholders were of the view that partnerships between telcos and OTT companies
are symbiotic in nature, and even though the terms of negotiations between different parties
remain privileged, there is no reported abuse of market power. In fact, it offers a win-win
situation for both consumers as well as service providers. OTT players also emphasised on the
availability of safeguards through net neutrality principles that are likely to prevent future
discrimination against them

C. Vertical Integration

Vertical integration has been sparked by technological convergence, allowing telecom

operators and digital solution providers, such as content providers, e-commerce platforms,
digital payment platforms, and other cloud-based technology solutions, to develop strategic
collaborations. Fixed-line, mobile, internet/broadband, and television services may all be
combined together to give what is now known as "quad play" services. Such bundling is
designed to create dependency but is also a tool to reduce consumer search costs and thereby
enhance welfare. The challenge for competition authorities is to isolate instances of market
abuse to the detriment of competition or to consumer welfare.

It may be premature to declare that vertical integration creates a cul-de-sac from which users
find it hard to switch. Some empirical studies do, however, seem to suggest that consumers are
likely to become ‘locked-in’ even in seemingly open ecosystems. For instance, a US-based
study found that only 1 per cent of Amazon Prime members are likely to consider competitor
retail sites, while non-Prime members are eight times more likely than Prime members to shop
between both Amazon and Target in the same session. In the words of one former Amazon
employee who worked on the Prime team, “It was never about the US$ 79, it was really about
changing people’s mentality so they wouldn’t shop anywhere else.”

45
Similarly, Facebook’s recent announcement to integrate the company’s messaging services –
WhatsApp, Instagram and Facebook Messenger – was to keep users highly engaged inside the
company’s ecosystem. Such integration may reduce users’ appetite for rival messaging
services, like those offered by Apple and Google.

With the convergence of technology, such 'walled-gardens' may become the norm. Customers
who are attracted into such an arrangement may opt to ‘stay in,' either because there is no
compelling reason for them to go 'outside,' or because migration expenses are prohibitively
high. The distinction is significant in terms of competition. It's also crucial to figure out whether
there can be efficient competition between 'walled gardens,' or whether network dynamics
imply a 'winner gets it all' scenario. If the latter is true, a vertically integrated service provider
will have the 'capacity' to stifle competition and use its market position.

However, if there is sufficient facilities-based competition it will not have an ‘incentive’ to do

so. Therefore, whether the service provider indulges in discriminatory treatment has to be
ascertained on a case-by-case basis and going forward the role of the Competition Authorities
will increase in assessing the impact of these newly emerging business models with telecom
operators acting as platforms to various applications ranging from entertainment to retail to
payment systems, etc. World over, M&As in the Technology, Media and Telecommunications
Sector (TMT) exceed the volume of transactions in any other sector and currently account for
nearly one quarter of the total M&A activities around the world. Moreover, the volume of
potentially anti-competitive mergers within the TMT sector accounts for 16 per cent of the total
volume of merger interventions around the world. In India, Reliance Jio has acquired stakes in
various companies including Balaji Telefilms, Hathaway and Den Networks paving the way to
become the country’s first vertically integrated digital services provider. Moreover, with
investments from internet giants such as Facebook and Google, RJio will further strengthen its
platform and the corresponding suite of services that can be made available to customers. Apart
from RJio, Airtel’s potential to integrate is illustrated by its presence across all communications
technologies, Direct to Home broadcast as well as a handful of OTT applications. Vodafone-
Idea experimented with integrating m-pesa as a payments service, which was discontinued in
2019 due to the deteriorating financial health of the sector and regulatory changes in the
payments’ banks business.

46
In India, stakeholders do not consider vertical integration to be a danger to competition. Cross-
country examples, on the other hand, imply a need for more investigation. According to the
general consensus among stakeholders, net neutrality laws prevent discrimination and anti-
competitive behaviors by prohibiting telecom companies from charging unequal prices. Net
neutrality is critical for fair play, especially as the industry moves toward convergence. Current
TRAI net neutrality laws restrict service providers from directing traffic toward their own
products at the expense of competitors who may not have the same distribution channel access.

D. Content Delivery and Traffic Management

As of December 2019, aggregate data traffic on the three largest private networks was predicted
to be 250 petabytes per day, with mobile connections surpassing a billion and data collective
becoming an increasingly mobile phenomenon. The growing pandemic forced a statewide
lockdown, which raised daily traffic to roughly 360-380 petabytes. To assist speedier
distribution of their information to users, internet organizations frequently use Content
Delivery Networks (CDNs) such as Akamai and Cloudflare, which provide geographically
spread servers. In turn, CDNs have agreements with ISPs or TSPs to host servers on their
network. CDNs reduce congestion in the last mile, lower transit costs and improve overall
network utilisation. With data traffic set to grow and a limited number of players controlling a
significant proportion of internet traffic, there is a potential for anti-competitive agreements
between CDNs, ISPs/TSPs and internet companies. Current TRAI regulations exempt CDNs
from restrictions on non-discriminatory treatment. Since commercial arrangements between
internet companies, CDNs and ISPs/TSPs are not disclosed, monitoring of such arrangements
and traffic patterns would help in ensuring net neutrality principles and fair competition.

47
ISPs/TSPs enter into peering agreements to exchange traffic without accessing the public
internet in order to maximize traffic efficiency. Peering agreements between ISPs are typically
unregulated and settlement-free. Smaller ISPs may, however, be required to pay a transit fee to
a bigger network provider in some instances. Even while peering appears to be a suitable option
for reducing network congestion in theory, there have been concerns about uneven treatment
of internet data. Several reports, for example, have claimed that certain Indian internet
providers are leveraging peering relationships to deliver faster speeds to specific services.
Moreover, with vertical consolidation on the rise and operators such as Reliance Jio and Airtel
developed their own OTT platforms, traffic management practices can be used to prioritise
own content over that of competitors. Though net neutrality rules apply, issues related to their
implementation in peering arrangements are still under consultation.

E. Unbundling Service and Infrastructure

Since liberalization, the licensing regime has undergone significant revisions to keep up with
technology advancements and market trends. The unified licensing (UL) regime, which was
implemented in 2013, allowed for the provision of all telecom services under a single license.
This allowed for economies of scale, or the use of the same network to provide diverse services,
resulting in system efficiency.

The UL regime, however, does not practicably segregate the infrastructure, network and service
layers, except for limited unbundling of the infrastructure layer in the form of the Infrastructure
Provider Category – 1 (IP 1) license. The network layer is integrated with the service layer.
Consequently, licensees are responsible for establishing and maintaining the network, servicing
the consumer, managing the tariffs and QoS. Considering likely future developments, the
National Digital Communications Policy (NDCP 2018) recommended unbundling of different
layers through a revised differential licensing regime. In 2019, the telecom regulator released
a pre-consultation paper to discuss the issue of enabling unbundling of different layers through
differential licensing, and to seek industry views on unbundling of different elements of the
telecoms supply chain.

48
Many other jurisdictions are modifying their telecommunications regulations to support the
expansion of markets and competition. For example, the licensing regime in Singapore has two
distinct types of licenses, namely (i) Facilities Based Operator for TSPs deploying their own
infrastructure, and (ii) Service Based Operator for entities intending to lease the telecom
network equipment from any Facilities Based Operator. The Australian Telecommunications
Act distinguishes between Carriers (entities which own their telecommunications infrastructure
on which content and carriage services are provided) and Carriage Service Providers (entities
which have direct contact with consumers) and Content Service Providers.

A differential licensing regime will bolster competition by enabling entities to focus on their
competitive advantage. The public sector through the Bharat Net programme can become the
primary infrastructure provider especially in rural areas. Perhaps the unbundled retail service
layer of the public sector can infuse more private sector investments for improving efficiency.

During the Stakeholder discussions, experts endorsed unbundling of licenses to foster

competition. With the advent of 5G networks, business models based on network-as-a-service
are likely to become a reality and an unbundled regime may be critical to realise the full
potential of 5G networks.

F. Active and Passive Infrastructure Sharing

The essential facilities doctrine (EFD) is the cornerstone of telecom law. These facilities are
necessary inputs in the production or delivery of final services, and they cannot be reproduced
economically. Interconnection regulations dealt with the first necessary facilities
considerations (2003). Designing terms and conditions of access to identified critical facilities
such as interconnection or the local loop has been a difficult issue in this regard. The
transmission grid in electricity, the network of pipelines in natural gas, the track in railroads,
access to airport terminals and slots, and berthing services in a port are also examples from
different industries. In telecommunications, interconnection regulations are aimed at lowering
barriers to entry, promoting infrastructure investment and facilitating competition.

49
As networks expanded, other infrastructure bottlenecks were addressed through regulations for
sharing facilities. For example, India was amongst the first countries to permit passive
infrastructure sharing in 2008. Incumbent operators in India hived off tower segments into
separate telecom infrastructure companies. Currently, India has more than 900 IP-1 registered
holders indicating that there are no significant regulatory barriers to enter the business.
Enabling infrastructure availability through sharing obviates unnecessary duplication of
infrastructure, helps the roll out of telecommunication services and improves efficiency.
Stakeholders emphasised the need for further enabling infrastructure, especially in the lead up
to 5G to lower costs of investments.

The NDCP 2018 has also emphasized the importance of sharing active infrastructure. Sharing
of active infrastructure is permitted among service providers based on mutual agreements,
subject to payment of a license fee as a percentage of AGR and spectrum usage charges,
according to existing licensing rules (SUC). These arrangements are commercial in nature and
do not fit under the category of necessary facilities, but they do help businesses run more
efficiently. The Additional costs related to sharing discouraged it take off in India. The need to
encourage active infrastructure sharing with minimal regulatory hurdles was highlighted by
stakeholders as a means to provide last-mile connectivity.

Only the Unified License, Cellular Mobile Telephone Service License, and UAS License allow
active infrastructure sharing and roaming. As a result, ISPs have been unable to get into such
partnerships. The telecom regulator proposed amending the requirements of the ISP license to
allow active infrastructure sharing in 2017. This was thought to accelerate the expansion of
Wi-Fi infrastructure, reducing mobile network congestion in high-density public spaces and
increasing internet penetration in rural areas.

The telecom regulator has also recommended setting up of Public Data Offices (PDOs) to
provide public Wi-Fi services. During consultations, it was pointed out that by setting up of
public Wi-Fi hotspots, reducing import duty on Wi-Fi equipment, enabling infrastructure
sharing and authentication of users through the e-KYC process, the cost of providing internet
through Wi-Fi can be reduced to 2 paise per MB as opposed to approximately 23 paise per MB
using mobile networks.

50
The model so proposed enables users to buy data for small denominations as per their needs,
somewhat similar to PCOs or chota (small) recharge which brought in mobile revolution in
India. In addition to significantly reducing capital and revenue expenditure, it would also lower
barriers to entering the market.

G. The Argument for Same Service Same Rule

Telecom Service Providers initial reaction to the rapid success of OTT communication services
was to demand a regulatory level playing field, TRAI began public consultations the
‘Regulation of OTT Players’ in 2015 and subsequently in 2018, but the consultations have not
concluded in recommendations. Even though the consultations began as an issue of ‘financial
arbitrage’ the focus has now shifted to security and lawful interception since the regulator is of
the view that the issue is beyond mere financial arbitrage.

The delivery of OTT services is dependent on the availability of telecom infrastructure. On the
one hand, OTT services that substitute for traditional SMS and voice create revenue pressure,
but on the other hand, their existence expands the market for operators and increases data
revenue. OTT services provide a wide range of functionalities that go beyond communication.
Companies such as WhatsApp, Amazon Prime, Netflix, are not required to pay any fee to the
government for any of the services they offer. Over time the relationship between telcos and
OTT players has become symbiotic and pro-competitive. For instance, in the United States,
Verizon is currently offering the Disney+ streaming service for 12 months to its ‘Unlimited’
or ‘5G Home Service’ customers. Similarly, HBO’s Max streaming service is being offered by
AT&Ts to all of its premium wireless customers and its top-tier home broadband subscribers
at no additional cost. On balance experts feel a separate regulatory framework is not necessary
for OTTs and excessive regulation may stifle technological innovation, and therefore be
counterproductive. While TSPs can develop their own OTT services and content, OTT service
providers did not have the flexibility to build infrastructure or deploy networks.

At the same time, TSPs pay a license fee on all revenue, including revenues earned through
in-house content apps, whereas OTT companies such as WhatsApp, Amazon Prime, Netflix,
are not required to pay any part of their revenue to the government to stream content.

51
Telecom Companies in India

The Communication Companies in India are on the ever-rising trend and there has been a
stupendous growth in this sector over the last decade. The telecommunication industry in India
is one of the rapidly growing industries in the world and has also developed the second largest
communication network. As of 31 December 2021, there are 1154.61 million wireless
subscribers including inactive users in India according to Telecom Regulatory Authority of
India (TRAI).

Operato Technology Subscribe Active Ownershi

rs rs (in Users p
millions) (In
Million
s)
Relianc 850(B5)/1800(B3)/2300(B40) LTE, TD- 415.72 367.34 Jio
e Jio LTE, FD-LTE, LTE-A Platforms
VoLTE, VoLTE, VoWiFi,
WIFI
Airtel GSM- – 900/1800 (EDGE), GPRS 355.77 348.69 Bharti
900(B8)/1800(B3)/2100(B1)/2300(B40) Airtel
LTE, TD-LTE, FD-LTE, LTE-A Limited
VoLTE, VoLTE, VoWiFi,
WIFI
Vi GSM-900/1800 (EDGE), GPRS 265.51 229.45 Governme
900(B8)/1800(B3)/2100(B1)/2300(B40)/250 nt of India,
0(B41) LTE, TD-LTE, FD-LTE, LTE-A, Vodafone
VoLTE, ViLTE, VoWiFi, Wi-Fi Group,
Aditya
Birla
Capital,
Private
Equity

52
 BSNL GSM – 900/1800 (EDGE), GPRS 117.62 58.16 Governme
850(B5)/2100(B1)/2500(B41) LTE, TD- nt of India
LTE, FD-LTE, LTE-A, VoLTE, WiMAX,
Wi-Fi

Defunct Operators:

Started Ceased
Operator Fate
Operations Operations

Merged into Axiata Spice

Telstra 1990 2000
Communications

Escotel 1996 2004 Merged into Idea Cellular

Made by Vodafone Group

Hutch Essar 1999 2007
and Essar Group

Axiata Spice
1992 2008 Merged into Idea Cellular
Communications

License cancelled by
S Tel 2008 2012
the Supreme Court of India

License cancelled by the

Etisalat 2010 2012
Supreme Court of India

BPL Mobile (Loop Ceased operations after

1995 2014
Mobile) expiration of license

53
Virgin Mobile India, T24
2009 2015 Merged into Tata Docomo
Mobile

Shut down following sale of

Videocon Telecom 2010 2016
spectrum to Bharti Airtel

Acquired by Reliance
MTS India 2009 2017
Communications

Merged with Vodafone India to

Idea Cellular 2002 2018
form Vi

Merged with Idea Cellular to

Vodafone India 2011 2018
form Vi

Aircel 1999 2018 Bankrupt

Telenor India 2009 2018 Acquired by Bharti Airtel

Tata Docomo 2009 2019 Acquired by Bharti Airtel

Reliance
2004 2019 Bankrupt
Communications

Mahanagar Telephone Subsidiary of BSNL until

1986 2020
Nigam Limited merger is complete

54
Market Size

India is the world’s second-largest telecommunications market.

The total subscriber base stood at 1189.15 million in September 2021. Tele-density of rural
subscribers reached 59.33% in September 2021, from the 58.96% recorded in September 2020.
This increase indicates a potential demand growth from the rural sector.

The total wireless or mobile telephone subscriber base reached 1166.02 million in September
2021, from 1,148.58 million in September 2020. The total number of internet subscribers
reached 794.88 million in September 2021. Of this subscriber base, the number of wired
internet subscribers was 24.29 million and wireless internet subscribers was 787.94 million.

Gross revenue of the telecom sector stood at Rs. 64,801 crores in the first quarter of FY22.The
total wireless data usage in India grew 16.54% quarterly to reach 32,397 PB in the first quarter
of FY22. The contribution of 3G and 4G data usage to the total volume of wireless data usage
was 1.78% and 97.74%, respectively, in the third quarter of FY21. Share of 2G data usage
stood at 0.48% in the same quarter.

Over the next five years, rise in mobile-phone penetration and decline in data costs will add
500 million new internet users in India, creating opportunities for new businesses.

By 2025, India will need ~22 million skilled workers in 5G-centric technologies such as
Internet of Things (IoT), Artificial Intelligence (AI), robotics and cloud computing

55
Investment/Major Development

With daily increasing subscriber base, there have been a lot of investment and development in
the sector. FDI inflow into the telecom sector during April 2000 – March 2021 totalled US$
37.97 billion according to the data released by Department for Promotion of Industry and
Internal Trade (DPIIT).

Some of the developments in the recent past are:

• In October 2021, Vodafone Idea stated that it is in advanced talks to sell a minority
stake to global private equity investors including Apollo Global Management and
Carlyle to raise up to Rs. 7,540 crore (US$ 1 billion) over the next 2-3 months.

• In October 2021, British satellite operator Inmarsat Holdings Ltd. announced that it is
the first foreign operator to get India’s approval to sell high-speed broadband to planes
and shipping vessels. Inmarsat will access the market via Bharat Sanchar Nigam Ltd.
(BSNL) after BSNL received a license from the Department of Telecommunications.

• In October 2021, Dixon Technologies announced plans to invest Rs. 200 crore (US$
26.69 million) under the telecom PLI scheme; this investment will include the
acquisition cost of Bharti Group’s manufacturing unit.

• In September 2021, Bharti Airtel announced an investment of Rs. 50 billion (US$ 673
million) in expanding its data centre business to meet the customer demand in and
around India.

• In August 2021, Tata Group company Nelco announced that the company is in talks
with Canadian firm Telesat to sign a commercial pact for launching fast satellite
broadband services in India under the latter’s Lightspeed brand, a move which will pit
the combined entity against Bharti Enterprises-backed OneWeb, Elon Musk’s SpaceX
and Amazon.

• In March 2021, Vodafone Idea Ltd. (VIL) announced that the acquired spectrum in five
circles would help improve 4G coverage and bandwidth, allowing it to offer ‘superior
digital experience’ to customers.

56
• In March 2021, Advanced Television Systems Committee (ATSC) and
Telecommunications Standards Development Society, India (TSDSI) signed a deal to
boost adoption of ATSC standards in India in order to make broadcast services available
on mobile devices. This allows the TSDSI to follow ATSC standards, fostering global
digital broadcasting standard harmonisation.

• In the first quarter of FY21, customer spending on telecom services increased 16.6% y-
o-y, with over three-fourths spent on data services. This spike in consumer spending
came despite of the COVID-19 disruption and lack of access of offline recharges for a
few weeks.

• India had over 500 million active internet users (accessed Internet in the last one
month) as of May 2020.

57
Government Initiatives

The Government has fast-tracked reforms in the telecom sector and continues to be proactive
in providing room for growth for telecom companies. Some of the key initiatives taken by the
Government are as follows:

• To drive the development of 6G technology, the Department of Telecommunications

(DoT) has developed a sixth generation (6G) innovation group.

• In October 2021, Telecom Secretary Mr. K. Rajaraman inaugurated the Quantum

Communication Lab at the Centre for Development of Telematics (C-DOT), Delhi, and
unveiled the indigenously developed Quantum Key Distribution (QKD) solution by C-
DOT. QKD can support a distance of >100 kms on standard optical fibre.

• In August 2021, the Department of Telecommunications (DoT) initiated discussions

with banks to address financial stress in the telecom sector, particularly Vodafone Idea
Ltd. (VIL) that urgently requires fund infusion to stay afloat.

• In August 2021, the Department of Telecommunications (DoT) officials stated that it

is working on a package, which includes reducing the revenue share licence fee to 6%
of adjusted gross revenue (AGR) of the operators from the current 8%. This would be
done by reducing the 5% universal service obligation levy by two percentage points
and providing relief of about Rs. 3,000 crore (US$ 403.63 million) annually to the
operators.

• In July 2021, Bharat Broadband Network Limited (BBNL), on behalf of the Department
of Telecommunication, invited global tender for the development of BharatNet through
the Public-private Partnership model in 9 separate packages across 16 states for a
concession period of 30 years. Under this project, the government will provide a
maximum grant of Rs. 19,041 crore (US$ 2.56 billion) as viability gap funding.

• The Rs. 12,195 crore (US$ 1.65 billion) production-linked incentive (PLI) scheme or
telecom is expected to bring in investment of around Rs. 3,000 crore (US$ 400.08
million) and generate huge direct and indirect employment.

58
• In April 2021, the government pointed out that firms such as Ericsson and Nokia are
now eager to expand their operations in India, and global companies like Samsung,
Cisco, Ciena and Foxconn have expressed interest to set up their manufacturing base in
the country for telecom and networking products.

• In March 2021, TEPC (Telecom Equipment Export Promotion Council) organised

India Telecom 2021—a platform for convergence of technologies and business
exchange.

• The Union Cabinet approved Rs. 12,195 crore (US$ 1.65 billion) production-linked
incentive (PLI) scheme for telecom & networking products under the Department of
Telecom.

• In 2021-22, the Department of Telecommunications has been allocated Rs. 58,737.00

crore (US$ 8 billion). 56% allocation is towards revenue expenditure and the remaining
44% is towards capital expenditure.

• Under Union Budget 2021-22, the government allocated Rs. 14,200 crore (US$ 1.9
billion) for telecom infrastructure that entails completion of optical fibre cable-based
network for Defence services, rolling out broadband in 2.2 lakh panchayats and
improving mobile services in the North East.

• On January 15, 2021, India and Japan signed an MoU to enhance cooperation in the
field of Information and Communications Technologies. The MoU was signed between
the Union Minister for Communications, Electronics and IT, Ravi Shankar Prasad, and
the Japanese Minister for Internal Affairs and Communications, Takeda Ryota.

• On January 6, 2021, the Department of Telecommunications (DoT) issued Notice

Inviting Applications (NIA) for auction of Spectrum in 700 MHz, 800 MHz, 900 MHz,
1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz bands. Last date for submission
of applications for participation in the auction is February 5, 2021, and auction to
commence online from March 1, 2021.

• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra
Modi, approved a proposal by Department of Telecommunications for setting up of
Public Wi-Fi Networks by Public Data Office Aggregators (PDOAs) to provide public
Wi-Fi services through Public Data Offices (PDOs).

59
• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra
Modi, approved the provision of submarine optical fibre cable connectivity between
Mainland (Kochi) and Lakshadweep Islands (KLI Project).

• On November 4, 2020, The Union Cabinet, chaired by the Prime Minister, Mr.
Narendra Modi, approved to sign a Memorandum of Understanding (MoU) between
the Ministry of Communication and Information Technology and the Department of
Digital, Culture, Media and Sports (DCMS) of United Kingdom Government on
cooperation in the field of telecommunications/information and communication
technologies (ICTs).

• On September 21, 2020, Prime Minister, Mr. Narendra Modi launched a project to
connect all 45,945 villages in Bihar with optical fibre internet service. This project will
be completed by March 31, 2021 at a cost of Rs. ~1,000 crore (US$ 135.97 million);
Rs. 640 crore (US$ 87.01 million) of capital expenditure will be funded by Department
of Telecommunications. The project was completed 60% in August 2021.

• In March 2020, the government approved the Production Incentive Scheme (PLI) for
Large- scale Electronics Manufacturing. The scheme proposes production-linked
incentive to boost domestic manufacturing and attract large investments in mobile
phone manufacturing and specified electronic components including Assembly,
Testing, Marking and Packaging (ATMP) units.

• FDI cap in the telecom sector has been increased to 100% from 74%; out of 100%. In
October 2021, the government notified 100% foreign direct investment (FDI) via the
automatic route from previous 49% in the telecommunications sector. FDI of up to
100% is permitted for infrastructure providers offering dark fibre, electronic mail and
voice mail.

60
Achievements

Following are the achievements of the Government in the past four years:

• Department of Telecommunication launched ‘Tarang Sanchar’ - a web portal sharing

information on mobile towers and EMF Emission Compliances.

• Payments on unified payments interface (UPI) hit an all-time high of 3.65 billion (by
volume), with transactions worth ~Rs. 6.54 trillion (US$ 87.11 billion) in September
2021.

• Over 75% increase in internet coverage from 251 million users to 446 million.

Road Ahead

Revenue from the telecom equipment sector is expected to grow to US$ 26.38 billion by 2020.
The number of internet subscribers in the country is expected to double by 2021 to 829 million
and overall IP traffic is expected to grow four-fold at a CAGR of 30% by 2021.

According to a Zenith Media survey, India is expected to become the fastest-growing telecom
advertisement market, with an annual growth rate of 11% between 2020 and 2023.

The Indian Government is planning to develop 100 smart city projects, and IoT will play a vital
role in developing these cities. The National Digital Communications Policy 2018 envisaged
attracting investment worth US$ 100 billion in the telecommunications sector by 2022. App
downloads in India is expected to increase to 18.11 billion in 2018(exceeded) and 37.21 billion
in 2022.

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EMF Overview

1. What is EMF? EMF stands for electromagnetic field. Electromagnetic fields are present
everywhere in our environment – the earth, sun and ionosphere are all natural sources of EMF.

Electromagnetic fields (EMFs) are created by electric power charges. There are two types of
fields – electric fields which result from the strength (voltage) of the charge and magnetic fields
which result from the motion (amperage) of the charge. A stationary charge will produce only
an electric field in the surrounding space. If the charge is moving, a magnetic field is also
produced. The mutual interaction of electric and magnetic fields produces an electromagnetic
field.

EMFs are also created whenever an electrical appliance is connected to the mains supply,
including many in daily use such as refrigerators, hairdryers and computers. Many electrical
appliances don’t just create EM fields – they rely on EMF to work. Television and radio, mobile
and cordless phones, remote control handsets, baby monitors and the communication systems
used by emergency services all communicate using Radio Frequency EM fields. So do wireless
technologies such as Wi-Fi, which is increasingly used by computer networks, to connect to
the Internet. Radio communications are a part of everyday life in today's society.

All radio communication systems utilise EMF in the radiofrequency (RF) part of the
electromagnetic spectrum. Typical background EMF levels from radio communications
systems are very low and well below safety guidelines. A cell phone handset contains a radio
transmitter and receiver, for sending and receiving radio signals from other phones. The radio
transmitter and receiver are low-powered, which means cell phones cannot send signals very
far. This is a deliberate feature of their design, since all that a cell phone has to do is
communicate with its nearest mast and base station (BTS) often also called a “cell”. The base
station has to pick up faint signals from many cell phones and route them onward to their
destination, which is why the masts have antennas (often mounted on a tower or tall building).

A cell phone automatically communicates with the nearest cell and calls can be transferred
from one base station to another. A mobile phone needs to have ‘sight’ of a mobile phone base
station. In other words, the radio signal from the phone to the base station needs to be of
adequate quality and should be uninterrupted to enable making calls.

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2. International Research on Health Aspects of EMF World Health Organisation (WHO) has
referred to approximately 25,000 articles published around the world over past 30 years, and
based on an in-depth review of scientific literature, has concluded: "current evidence does not
confirm the existence of any health consequences from exposure to low level electromagnetic
field". Since the effects on human beings are to be studied over a long period of time, further
studies are going on around the world.

With reference to Electromagnetic Radiation emanating from cellular mobile towers, World
Health Organization (WHO) in its Fact Sheet No. 304, May 2006 on Electromagnetic Fields
and Public Health (Base Stations and Wireless Technologies) has concluded that: "considering
the very low exposure levels and research results collected to date, there is no convincing
scientific evidence that the weak Radio Frequency (RF) Signals from base stations and wireless
networks caused adverse health effects.

“From all evidence accumulated so far, no adverse short- or long-term health effects have been
shown to occur from the RF Signals produced by base stations."

In September 2013, WHO in online question and answers, have mentioned that "Studies to date
provide no indication that environmental exposure to RF fields, such as from base stations,
increases the risk of cancer or any other disease."

3. Steps taken by Department of Telecommunications

Department of Telecommunication (DoT), since 2008, has been monitoring global

developments and has already taken necessary steps and adopted stricter norms for safety from
EMF radiation that are emitted from mobile towers and mobile handsets. Government of India
has been taking due precautions and necessary actions in respect of EMF radiation emitted
from mobile towers and mobile handsets by issuing various guidelines and norms taking into
account the international standards/norms prescribed by International Commission on Non-
Ionizing Radiation Protection (ICNIRP) as recommended by World Health Organisation.

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4. Ensuring compliance to various safe limit standards

a) All Base Transceiver Stations (BTSs) are to be safe-limits compliant and certification to this
effect is submitted to respective Telecom Enforcement Resource and Monitoring (TERM)
Cells of DoT on launch, whenever a change occurs and also on a biennial basis.

b) All new BTS sites start radiating commercially only after such certification is submitted to
relevant TERM Cells. Format for Certification of BTS for compliance of EMF levels are
provided by DoT/TEC in line with international norms of (International Telecommunication
Union) ITUK.52 and ITU- K.100 providing details of site data, photographs, technical
parameters, frequency, power density etc.

c) Extensive Audit of Compliance of Self-Certificates being submitted by Telecom service

Providers is regularly being carried out by TERM field units. Further, every year up to 10% of
the total BTSs are also tested by TERM Cells where physical measurements are conducted.

d) Additionally, BTSs against which there are public complaints are also tested by TERM
Cells.

e) The testing is done as per detailed test procedure published by Telecom Engineering Centre
(TEC).

f) In case, any BTS site is found to violate the prescribed EMF norms, actions are taken to put
a penalty of 10 lakh per BTS per incidence including closing of BTS if violation persists

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5G developments (to keep pace with growing numbers of mobile subscribers)

According to GSMA Intelligence, in 2020, 7.9 billion mobile connections are forecasted to
increase to 8.6 billion by 2025. There will be 600 million new added connections in which two-
thirds of it are coming from Asia Pacific and Sub-Saharan Africa.

To grow revenue and cut costs in a low-growth economic environment, operators are
increasingly seeking ways to develop the mobile ecosystem. This development stage is made
more complicated by the demanding requirements of 5G services, i.e., high speed, low latency,
and ultra-reliability. Mobile operators will need to evolve networks – using innovations such
as virtual RAN, edge networking, and network automation – to meet the demands of the 5G
era. Operators will also need to diversify revenue streams into areas such as media and
entertainment, advertising, and IoT to seek growth beyond providing core telecommunications
services.

While speed is the most touted benefit of 5G, other improvements (e.g., network slicing, edge
computing, and low latency services) are beginning to gain attraction as the next major steps
for 5G services and benefits. For the next five years, 4G networks will still have the majority
of connections worldwide in both consumer and enterprise levels, accounting 57.63% of the
connections worldwide. However, most of the key benefits of 5G for enterprises will not be
unlocked until standalone 5G architecture is deployed and operational, as its advanced
capabilities address new markets and make new use cases commercially viable. There are still
many considerations for operators as they strive to ensure a successful evolution of the network,
while also maintaining a profitable business and increasing future revenues.

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COVID-19’s Impact on the Telecommunications Industry

The COVID-19 pandemic has been an extraordinary test for consumers, businesses, and
communities, causing widespread concern and economic hardship across the world. As
lockdowns and movement restrictions were imposed in many countries to respond to the
growing outbreak, increasing numbers of consumers turned to digital channels for
entertainment, information, education, and to stay in touch with family and friends. This led to
a whole new emphasis on the importance of network connectivity and services offered by the
telecommunications sector. Due to major COVID-19-related restrictions set by governments,
such as stay-at-home orders and quarantine measures, the telecommunications sector saw a
massive spike in data traffic and increased use of broadband services as more people relied on
connected devices and IoT devices.

The traffic growth observed by several companies across different industries clearly displayed
an increased reliance on connectivity and digital services. In response to this development,
mobile operators and digital service providers adapted to changes in demand and demonstrated
agility through accelerated channel shifts and enhanced digital capabilities. To that effect, the
telecommunications sector continues to play a critical role in supporting governments,
consumers, and businesses as they navigate the following three conditions of adjustment for
the uncertain times ahead:

• The Now, which emphasizes supporting people, consumers, and suppliers.

• The Next, which calls for refocusing the business to withstand new threats and seize new
opportunities in a slowly recovering economy.

• The New Normal, which will see rapid shifts in cultural norms, values, and behaviours.

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Developing resilience in the face of a global crisis

The importance of connectivity has never been more emphasized. Over the course of the
pandemic, mobile operators delayed 5G rollouts to focus on ensuring people could stay
connected to their family, friends, and workplaces. As a huge number of people relied on
mobile technologies during lockdowns, work was done in 4 key areas:

1) Maintaining Stable Internet Connection

With entire populations suddenly confined to homes, networks in domestic areas felt the strain
from the surge in online activities related to work and leisure. To maintain the network stability
expected by people, operators added capacity or reconfigured capacity profiles accordingly to
ensure networks remained robust and secure.

2) Disseminating Vital Information

Working closely with governments to reach out to urban and rural communities, operators
helped to deliver vital information directly to mobile devices. Operators leveraged big data
capabilities to monitor and limit the spread of COVID-19 by providing timely health and
emergency updates. In countries where the number of confirmed cases was fast-developing,
having the resources to keep citizens up to date with the latest advice and prevent the spread of
disinformation was of paramount importance.

3) Better Connectivity for Emergency Services

COVID-19 demonstrated how much of a priority it is to connect health centres and hospitals
to enable advanced services such as remote diagnostics and telemedicine. To prevent another
global health crisis from overwhelming health centres, regulations may relax in some markets
to allow operators to ensure connectivity for emergency services is maintained.

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4) Easier Payment Solutions and Data Incentives

To alleviate some of the hardships experienced during this time, many operators simplified the
payment process for post-paid numbers and top-ups for prepaid numbers by enabling easy
access for subscribers through payment gateways, with the help of digital service providers.
Several operators in developing markets also lifted data caps to encourage increased usage, and
introduced the expansion of transaction and mobile account limits.

In summary, 2020 has demonstrated that the telecommunications sector played an integral role
in supporting consumers’ wellbeing by maintaining ability to keep in touch with family and
friends while staying productive in their work. However, to meet future opportunities in this
new societal landscape, the Next and New Normal will demand the reinvention of operators’
business models to embed further agility and resilience. Today’s value optimization strategies
need a mindset of intelligent business transformation underpinned by trust through secure
people-centric services and enhanced ways of working.

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The Digital ecosystem is the way forward

As the world gradually recovers from the pandemic and the coinciding economic recession,
understanding consumer needs to inform long-term strategies will be the key in getting back
on track. Enabling new workplace and business practices now will ensure these steps will be
fundamental to achieve the cultural change required of today’s strategies for robust business
continuity.

From speaking to our business partners and observing market trends, we can conclude that
consumers will be interested in new services as their needs change to reflect their lives,
increasing demand for solutions across entertainment, IoT-connected homes, gaming, social
activities, and health. Mobile operators must extend the digital ecosystem if they want to be on
even footing or stay ahead of platform players who are determined to disrupt the market with
innovative digital solutions. The need to continue investment in 5G will take precedence for
operators but the challenges driven across both supply and demand will continue to increase
operational pressures including customer demand for robust omnichannel support in service
and sales, on top of maintaining network and IT stability. As the human impact of COVID-19
reshapes consumer practices, operators have the unique opportunity to fundamentally reinvent
and evolve relationships with consumers by finding new, secure, and sustainable ways of living
through reliable, intuitive, and innovative products and services.

Across the world, the COVID-19 pandemic has therefore revealed extensive weaknesses in
local economies and re-emphasized the pressure for countries to develop a robust digital
ecosystem. To build more resiliency, more companies, particularly those in retail, transport,
logistics, manufacturing, and healthcare, will need to potentially increase investment in digital
transformation to protect businesses from future force major events. Digital service providers,
especially those operating across the entire value chain, should leverage their expertise to
become key partners to enterprises in realizing digital transformation goals. For mobile
operators, 5G network implementation strategies will be more important than ever to support
these initiatives.

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How Mobile Operators can take action

• Promote greater value on top of speed

The offer of faster upload/download speeds is attractive, but will not be a long-term, sustainable
value proposition for 5G pickup. Enterprises that are considering 5G now have goals that
extend beyond the demands of past mobile user generations: they are investing to create new
ways to interact with consumers, do business, and make money. Productize 5G solutions
according to customer segments to establish new revenue streams.

• Build an ecosystem of experienced partners

Consider what use cases are suitable and relevant for your business before committing to 5G
implementation. The most reliable and informed suppliers can make pragmatic decisions that
benefit your organization. Value those that take time to understand your business and strategic
goals.

How Technology Vendors and Platform Players can take action?

• Sell Solution not technology:

Today, there is a lot of clout surrounding the “digital integration” of different hardware and/or
software. Operational 5G success will depend on the interplay of technologies across multiple
domains and systems. Hyper-collaboration is desirable but do not overestimate your products
and services’ strength in this area. It is better to demonstrate excellence and secure your
technology’s worth instead by producing pragmatic go-to-market solutions and improving
industry best practices with thorough implementation guidance.

• Invest in the end-to-end channels:

With the 5G lifecycle predicted to see greater digitization along with the network as demand
scales up across the world, on-the-ground professional services will be needed to guide
consumers for onboarding. Design, build, and implementation partners are the biggest
priorities, but those with managed services skills are also an important component to include.

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How Enterprises can take action?

• Seek practical ecosystems with flexible integration skills-

To facilitate 5G’s success, people, processes, and technologies have to be connected

seamlessly. Enterprise data is shifting to the cloud to accommodate this transition but the digital
environments are often diverse and could get complicated once operational and information
technologies converge. Depending on your industry, finding the right suppliers that can
translate between the language of OT and IT will be challenging, but very valuable to know.
Given the breadth of 5G’s impact, the smartest suppliers will have taken time to map out
ecosystems and build partnerships across solution specialists and other market stakeholders.

• Evaluate the most Appropriate option-

The global IoT market has grown tremendously over the years and has demonstrated one
crucial fact: it’s not possible to do everything under one roof. With enterprise verticals that
expect a certain quality and haste in product delivery, it is recommended to leverage partners
with deep knowledge and the resources to meet specific project targets.

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Providing and developing the 5G Experience

5G is touted as the connectivity fabric that will fundamentally reshape our collective future,
promising to bring a new era of advanced business processes and outcomes. The worldwide
competition for 5G-first launches began in 2019 and continued in 2020 with mobile operators
racing to make it accessible to the consumers. With technology capable of serving up new
applications, consumers and enterprises will benefit from high quality connectivity that can
realize new levels of productivity and efficiency. Building infrastructure for 5G, however, has
been quite a challenge for many markets. Adding the pandemic that began a global lockdown
early in Q1 2020, many countries have delayed their 5G rollout plans.

The earliest to make 5G commercially available was South Korea. The country’s operators first
launched 5G services for smartphone users as early as April 2019. Entering 2020, the United
States, Switzerland, China, and Kuwait became runners-up to make 5G services available.
Since then, the deployment of 5G and the worldwide count for 5G connections continued to
soar. In Q2 2020 alone, 19 operators launched 5G networks across 12 markets. These countries
include Belgium, Hong Kong, the Netherlands, Poland, and Sweden.

In general, the 5G networks of 2020 were adopted in areas that had already embraced the latest
technologies like 4G. That being said, implementing 5G requires more than just upgrading
existing networks. As new network infrastructure is expected to support investments, forward-
looking enterprises have already planned for digital transformation, OT/IT convergence is seen
as the key driver of 5G’s pickup across several industries. Requiring a lot of effort from mobile
operators, equipment vendors and manufacturers, as well as digital service providers,

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 • Configuring 5G network infrastructure for scalability and flexibility

The COVID-19 pandemic has revealed how critical digital transformation is to enterprises and
governments. With day-to-day operations affected and factories slowing down production due
to government restrictions, IT needs to respond to the demands from OT with particular
emphasis on security, integration, visibility, control, and compatibility. Today, more than ever,
these factors lead to optimized business continuity and future success to deal with a world full
of uncertainty, 5G network infrastructure has to be continually developed to be resilient and
adaptable to consumers' growing network demands. So far, these are the main features which
several operators have promised:

o Higher speeds and greater capacity for consumers and businesses

o Very low latency communications
o Efficient spectrum and network resource management
o Seamless availability and performance for indoor and outdoor environments
o Flexible and programmable access and core networks
o Intelligence-driven, automated decision-making to manage network performance
o A variety of SLAs to fit individual customer or industry use cases

Most commercial 5G networks currently use a non-standalone (NSA) architecture. NSA 5G

deployments allow operators to increase mobile broadband capacity for consumers, supporting
services such as fixed wireless access, video surveillance, and basic cloud gaming.

The enterprise/vertical markets offer the greatest, newest opportunities that require even higher
levels of performance and reliability. To unlock the full feature set of 5G, operators have
already begun shifting from NSA to Standalone (SA) architecture to enable low-latency
communications and support for massive numbers of connected devices. Envisioned as fully
virtualized and capable of automatically provisioning custom data streams for specific
applications, NSA 5G represents the next stage for data capacity, localized computing, and
bespoke services. As the number of connected devices increases exponentially around the
world, backhauling the data created from machines that consume and produce data measured
in gigabytes per second requires the network infrastructure to adopt a new cloud native core.

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Market Overview

The telecom market split into three segments

Telecom

Mobile(Wireless) Fixed line(Wireline) Internet Services

Mobile (wireless)-

Comprises establishments operating and maintaining switching and transmission facilities to

provide direct communication via airwaves Internet services.

Fixed-line (wireline)-
Consist of companies that operate and maintain switching and transmission facilities to provide
direct communication through landlines, microwave or a combination of landlines and satellite
link-ups.

Internet Services-

Include Internet Service Providers (ISPs) that offer broadband internet connections through
consumer and corporate channels.

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Expanding telecom subscriber base on the face of government initiatives

 India is currently the second-largest telecommunication market and has the second-highest
number of internet users in the world.

 The PLI scheme in telecom and networking products aims to make India a global hub of
manufacturing telecom equipment. It is estimated that full utilisation of the scheme funds is
likely to lead to incremental production of about Rs. 2.4 lakh crore (US$ 32.01 billion) with
exports of ~Rs. 2 lakh crore (US$ 26.67 billion) over five years.

 India’s telephone subscriber base increased by 0.60% to 1187.90 million in February 2021,
from 1,183.49 million in January 2021.

 In India, the tele density (defined as the number of telephone connections for every 100
individuals) stood at 87.26%, as of February 2021.

 The total wireless or mobile telephone subscriber base increased to 1167.71 million in
February 2021, from 1160.59 million in February 2020

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Wireless subscriptions witness robust growth over the years

 Wireless subscription has grown robustly over the past few years.

 The growth in wireless subscriptions has led to a significant rise in wireless tele-density.

 In FY20, wireless subscription stood at 1,157.75 million, whereas wireless tele-density

reached 85.57%.

 The total wireless subscriber base in the country stood at 1167.71 million, with a tele density
of 85.78%, as of February 2021.

 The wireless subscriber base of Jio stood at 414.99 million, Bharti Airtel (348.33 million)
and Vodafone Idea (282.62 million), as of February 2021.

 In February 2021, Reliance Jio gained 4.26 million wireless subscribers, followed by Bharti
Airtel, which added 3.73 lakh.

As per January 2022, Reliance Jio gained 2.01 million wireless subscribers, followed by
Bharti Airtel, which added 1.3 million.

Wireless Subscription (in Millions)

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Strong growth in broadband drives internet access revenues

 Total broadband subscription in the country grew from 149.75 million in FY16 to 687.44 in
FY20.

 The number of wired broadband subscriptions stood at 19.18 million in FY20.

 Wireless broadband subscribers stood at 668.26 million in FY20.

 In India, the broadband subscriber base stood at 765.09 million, as of February 2021.

 As of February 2021, the top five service providers (Reliance Jio Info COMM Ltd., Bharti
Airtel, Vodafone Idea, BSNL and Atria Convergence) contributed 98.83% to the total
broadband subscribers.

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Number of internet subscribers increasing at a fast pace

The total number of internet subscribers increased from 757.61 million in January 2021 to
765.09 million in February 2021. Of this subscriber base, the number of wired internet
subscribers was 22.26 million and wireless internet subscribers were 742.84 million.

 The number of internet subscribers in the country increased at a CAGR of 21.36% from
FY16 to FY20 to reach 743.19 million in FY20.

 The number of internet subscribers in the country is expected to double by 2021 to 829
million. Overall IP traffic is expected to grow four-fold at a CAGR of 30% by 2021.

 As per TRAI, average wireless data usage per wireless data subscriber was 11 GB per month
in FY20. It is expected to reach to 18 GB by 2024.

The above chart Indicates the growth of Internet service users.

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Exponential growth in data consumption

 India holds the distinction of being the largest consumer of mobile data globally.

 Data consumption in the country has witnessed exponential growth over the course of the
past few years.

 The total wireless data usage in India grew 1.82% quarterly to reach 25,227 PB in the third
quarter of FY21.

 The contribution of 3G and 4G data usage to the total volume of wireless data usage was
2.81% and 96.48%, respectively, in the third quarter of FY21. Share of 2G data usage stood at
0.71% in the same quarter.

Total wireless data usage (in petabytes)

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Mobile application market: fast-growing segment

 In 2020, India accounted for 14% of the global app installs.

 In 2019, India surpassed the US to become the second-largest market in terms of number of
app downloads.

 App downloads in the country increased from 12.07 billion in 2017 to 19.00 billion in 2019
and is expected to reach 37.21 billion in 2022.

 India has witnessed a 195% growth in app downloads in the past three years.

 Indian users spent around US$ 370 million through app stores in 2019.

 The segment’s growth is expected to be driven by increasing mobile connections and

availability of low-range smartphones.

 Over 100 million apps are downloaded every month across different platforms such as iOS
and Android.

Telecom Revenues

The Indian telecom sector’s gross revenue declined from US$ 40.29 billion in FY16 to US$
35.87 billion in FY20.

 Gross revenue of the telecom sector stood at Rs. 68,228 crore (US$ 9.35 billion) in the third
quarter of FY21.

 Indian telecom sector’s revenue expanded at 5.58% in FY20 on the back of stabilising tariff
wars and increased spending by subscribers due to minimum recharge plans.

Telecom sector in India witnessed a growth of 4.24% in Adjusted Gross Revenue (AGR)
in the July to September quarter 2021, according to latest data of Telecom Regulatory
Authority of India.

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The Gross Revenue (GR) and Adjusted Gross Revenue (AGR) of telecom service sector for
this quarter are Rs 67,300 crore and Rs 53,510 crore, respectively.

Thus, GR increased by 3.86% and AGR increased by 4.24% in July to September quarter
2021, as compared to previous quarter. “The Y-O-Y growth in GR and AGR in Q.E. Sep-21
over the same quarter in last year has been -1.36% and 17.07%, respectively.

Emergence of tower industry

A surge in the subscriber base has necessitated network expansion covering a wider area,
thereby creating a need for significant investment in telecom infrastructure.

 To curb cost and focus on core operations, telecom companies have been segregating their
tower assets into separate companies. For example: Reliance Communications has decided to
finalise a deal to sell its stake in Reliance Infrabel. The value of the deal is around US$ 3.68
billion.

 Creating separate tower companies has helped telecom companies lower operating cost and
improve capital structure. This has also provided an additional revenue stream.

 Inspired by the success seen by Indian players in towers business, most of the operators
around the world are replicating the model.

 In April 2021, Bharti Airtel Ltd. announced a new corporate structure by forming a new
telecom entity to sharpen its focus on digital assets. The telco has formed a new subsidiary,
Airtel Ltd., which will house its telecom business.

 In the same month, Dixon Technologies (India) Ltd. partnered with Bharti Enterprises Ltd.
to make telecom and networking equipment. Under the deal, Dixon will make modems, routers,
set-top boxes and IoT devices for telecoms including Bharti Airtel Ltd.

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Recent Trends and Strategies

1) Green telecom

• The green telecom concept is aimed at reducing carbon footprint of the telecom industry
through lower energy consumption.

• The Government proposed a joint task force between Ministry of New and Renewable
Energy (MNRE) and Department of Telecommunication to promote green technology in the
sector.

2) Expansion to rural market

• Over 62,443 uncovered villages in India will be provided with village telephone facility with
subsidy support from the government’s Universal Service Obligation Fund (thereby increasing
rural tele-density).

• Broadband service provider, Excitel, plans to raise Rs. 200 crore (US$ 28.37 million) in
funding as it plans to expand FTTH (fibre to the home) deployment on its network and establish
presence in 50 cities by December 2021.

3) Emergence of BWA technologies

• BWA technologies, such as WiMAX and LTE, is among the most recent and significant
developments in wireless communication.

• Bharti Airtel VoLTE and Reliance Jio 4G services are live across all the 22 telecom circles
since 2019.

• India is expected to be the second-largest market in 5G services followed by China in the next
10 years.

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4) Commercial SMS traffic

• Due to higher post-pandemic digital adoption, daily commercial SMS traffic in India,
currently, has increased by ~20%, even as overall text messaging continues to shrink. At
present, ~1.3 billion commercial SMSs are sent every day

5) Universal Service Obligation Fund

• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi,
approved the provision for a ‘Universal Service Obligation Fund (USOF)’ scheme to provide
mobile coverage in Arunachal Pradesh and two districts of Assam, namely KarbiAnglong and
Dima Hasao, under the Comprehensive Telecom Development Plan (CTDP) for the North
Eastern Region (NER). Internet of Things (IoT)

• IoT is the concept of electronically interconnected and integrated machines, which can help
in gathering and sharing data. The Indian Government is planning to develop 100 smart city
projects where IoT will play a vital role in development of those cities.

• Reliance Jio has partnered with Samsung Electronics to set up a nationwide IoT network.

• Jio's IoT platform is ready to be commercially available in 2020.

6) Public Wi-Fi Networks

• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi,
approved a proposal by Department of Telecommunications for setting up of Public Wi-Fi
Networks by Public Data Office Aggregators (PDOAs) to provide public Wi-Fi services
through Public Data Offices (PDOs).

7) Universal Service Obligation Fund

• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi,
approved the provision for a ‘Universal Service Obligation Fund (USOF)’ scheme to provide
mobile coverage in Arunachal Pradesh and two districts of Assam, namely KarbiAnglong and
Dima Hasao, under the Comprehensive Telecom Development Plan (CTDP) for the North
Eastern Region (NER).
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8) Satellite-based Narrowband-IoT Network

• In December 2020, BSNL, in partnership with Skylotech India, announced a breakthrough in

satellite-based NB-IoT (Narrowband-Internet of Things) for fishermen, farmers, construction,
mining and logistics enterprises.

9) Investment in optical fibre network

• Reliance Jio Info COMM is going to expand its optical fibre network to over 1,100 cities
under its Jio GigaFiber brand

• On September 21, 2020, Prime Minister, Mr. Narendra Modi launched a project to connect
all 45,945 villages in Bihar with optical fibre internet service. This project will be completed
by March 31, 2021 at a cost of Rs. ~1,000 crore (US$ 135.97 million); Rs. 640 crore (US$
87.01 million) of capital expenditure will be funded by the Department of
Telecommunications.

• In December 2020, the Union Cabinet, chaired by the Prime Minister, Mr. Narendra Modi,
approved the provision of submarine optical fibre cable connectivity between Mainland
(Kochi) and Lakshadweep Islands (KLI Project).

10) Consolidation

• Vodafone India and Idea have merged into Vodafone idea. Vodafone Idea unified assets and
completed network integration in June 2020.

11) Consumer spending

• In the first quarter of FY21, customer spending on telecom services increased 16.6% y-o-y,
with over three-fourths spent on data services. This spike in consumer spending came despite
of the COVID-19 disruption and lack of access of offline recharges for a few weeks.

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12) Rising investment

• Between April 23 and July 16, 2020, Jio Platforms Ltd. sold 25.24% stake worth Rs. 1.52
trillion (US$ 21.57 billion) to various global investors in separate deals involving Facebook,
Silver Lake, Vista, General Atlantic, Mubadala, Abu Dhabi Investment Authority (ADIA),
TPG Capital, L. Catterton, Public Investment Fund (PIF), Intel Capital, Qualcomm Ventures
and Google.

• In November 2020, Google paid Rs. 33,737 (US$ 4.5 billion) for a 7.73% stake in Reliance
Industries Ltd.’s digital subsidiary—Jio Platforms Ltd.

13) Mobile banking

• Department of Posts launched mobile banking for its saving account customers.

• As of January 2020, 213 banks were live on unified payment interface (UPI).

14) Digital experience

• In March 2021, Vodafone Idea Ltd. (VIL) announced that the acquired spectrum in five
circles would help improve 4G coverage and bandwidth, allowing it to offer ‘superior digital
experience’ to customers.

15) Partnership

• In March 2021, Advanced Television Systems Committee (ATSC) and Telecommunications

Standards Development Society, India (TSDSI) signed a deal to boost adoption of ATSC
standards in India in order to make broadcast services available on mobile devices. This allows
the TSDSI to follow ATSC standards, fostering global digital broadcasting standard
harmonisation.

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Strategies Adopted

1)MARKETING STRATEGY

 Players are using innovative marketing strategies to succeed in this sector.

 Vodafone Idea launched #StrongerEveryHour with an aim to highlight the improved network
of Vodafone Super Net 4G - India’s Data Strong Network.

 Airtel launched a new ad campaign ‘Sab Kuch Try Karo, Fir Sahi Chuno’ and rolled out a
new campaign 'Open to Questions’, highlighting its aim to resolve every single customer query,
learn quickly from failures and ensure these are not repeated.

2) DIFFERENTIATION

 Players differentiate themselves by providing different services to customers.

 Bharti Airtel has already partnered with Amazon Prime and Hotstar and is expected to tie up
with Netflix to offer free subscription to Netflix’s content for its mobile customers.

 In September 2020, Reliance Jio partnered with 22 foreign airlines for inflight internet
connectivity with plans starting at Rs. 499 (US$ 6.76) per day.

 In September 2020, Airtel and Radware partnered to offer cloud security services to
businesses in India.

3) REDUCED NUMBER OF PLANS

 Players have reduced the number of plans on offer and now offer a limited number of simple
tariffs plans along with marquee plans.

 This has simplified choosing plans for customers as they can choose the best deals for
themselves.

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4)PRICING STRATEGY

 Player’s price their products very carefully due to the price sensitive nature of customers and
high competition in the sector.

Growth Drivers

Sector benefits from rising income, growing young population

Rising income and growing rural market fuels demand for telecom services

Incomes have risen at a brisk pace in India and will continue rising given the country’s strong
economic growth prospects.

 GDP per capita of India is expected to grow at a CAGR of 7.47% from US$ 1,481.56 in
2012 to US$ 3,273.85 in 2023.

 Increasing income has been a key determinant of demand growth in the telecommunication
sector in India.

 The emergence of an affluent middle class is triggering demand for the mobile and internet
segments.

 A young growing population is aiding this trend (especially the demand for smart phones).

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Strong Policy Support Crucial to The Sector’s Development

1) To compensate the consumers in case of call drop

• In August 2017, TRAI directed operators to have a call-drop rate of not greater than 2%.

• The policy measures of TRAI have had a positive impact. Call-drops in the country decreased
from 0.94% in 2016 to 0.52% in March 2018.

2) Standards of quality wireline and wireless services

• In 2015, TRAI made regulations to amend the standards of quality of wireline (telephone
service) and cellular mobile telephone services. These regulations have been laid down to
ensure effective compliance with the quality-of-service regulations and to protect the interest
of the customers.

3) Relaxed FDI norms

• FDI in telecom sector has been increased to 100% from 74%. Out this, 49% will be done
through automatic route and the rest will be done through the FIPB approval route.

• FDI of up to 100% is permitted for infrastructure providers offering dark fibre, electronic
mail and voice mail.

4)Telecommunication tariff order

In February 2018, TRAI passed the Telecommunication Tariff (63rd amendment) order,
according to which, telecom firms are free to give promotional offers to customers if the offers
are transparent, non-predatory and non-discriminatory.

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5)International Tie-ups

• On January 15, 2021, India and Japan signed an MoU to enhance cooperation in the field of
Information and Communications Technologies. The MoU was signed between the Union
Minister for Communications, Electronics and IT, Ravi Shankar Prasad, and the Japanese
Minister for Internal Affairs and Communications, Takeda Ryota.

• On November 4, 2020, The Union Cabinet, chaired by the Prime Minister, Shri. Narendra
Modi, approved to sign a Memorandum of Understanding (MoU) between the Ministry of
Communication and Information Technology and the Department of Digital, Culture, Media
and Sports (DCMS) of United Kingdom Government on cooperation in the field of
telecommunications/information and communication technologies (ICTs).

6) Financial support

• The USOF (Universal Service Obligation Fund) is expected to extend financial support to
operators providing services in rural areas and encourage active infrastructure sharing among
operators.

7) Set up internet connections

• The Department of Information Technology intends to set up over 1 million internet-enabled

common service centres across India as per the National e-Governance Plan.

• On August 8, 2016, TRAI made the 10th amendment to the TCPR (Telecom Consumers
Protection Regulations) permitting telecom companies to offer data packs having maximum
validity of 365 days.

8) Financial support

• The USOF (Universal Service Obligation Fund) is expected to extend financial support to
operators providing services in rural areas and encourage active infrastructure sharing among
operators.

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9) Indian Mobile Congress

• On December 8, 2020, Prime Minister Narendra Modi inaugurated and addressed the virtual
edition of the India Mobile Congress (IMC) 2020.

• The objective of IMC 2020 was to align with the Prime Minister’s vision to promote
‘Aatmanirbhar Bharat’, ‘Digital Inclusivity’ and ‘Sustainable development, entrepreneurship
& innovation’ and drive foreign and local investments, encourage R&D in the telecom and
emerging technology sectors.

10) Enhanced spectrum limit

• The prescribed limit on spectrum will be increased from 6.2 MHz to 2x8 MHz (paired
spectrum) for GSM technology in all areas other than Delhi and Mumbai, where it will be 2x10
MHz (paired spectrum).

• Telecom players can, however, obtain additional frequency. there will be an auction of
spectrum subject to the limits prescribed for the merger of licenses.

• On January 6, 2021, the Department of Telecommunications (DoT) issued Notice Inviting

Applications (NIA) for auction of Spectrum in 700 MHz, 800 MHz, 900 MHz, 1,800 MHz,
2,100 MHz, 2,300 MHz and 2,500 MHz bands. Last date for submission of applications for
participation in the auction is February 5, 2021, and auction to commence online from March
1, 2021.

11) Make in India

• Government of India announced the Phased Manufacturing Programme (PMP) to promote

domestic production of mobile handsets. This initiative will help in building a robust
indigenous mobile manufacturing ecosystem in India and incentivise large scale
manufacturing.

• In January 2020, HFCL Limited, formerly known as Himachal Futuristic Communications,

supplied indigenously designed, developed and manufactured 100,000 Wi-Fi systems in a
record time, and stated that Wi-Fi Access Network Interface (WANI) with the government’s
ambitious BharatNet initiative would augment broadband uptake in rural India.

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• In March 2020, the Government approved the production-linked incentive (PLI) scheme for
Large Scale Electronics Manufacturing. The scheme proposes production linked incentive to
boost domestic manufacturing and attract large investments in mobile phone manufacturing
and specified electronic components including Assembly, Testing, Marking and Packaging
(ATMP) units.

• On November 11, 2020, the Union Cabinet approved the production-linked incentive (PLI)
scheme in 10 key sectors (including electronics and white goods) to boost India’s
manufacturing capabilities, exports and promote the ‘Atmanirbhar Bharat’ initiative.

• Under this scheme, incentives will be provided to manufacture and export specific telecom
& networking products.

• The government approved Rs. 12,195 crore (US$ 1.65 billion) for telecom & networking
products under the Department of Telecom.

12) Adequate 5G Airwaves

• In January 2021, the Competition Commission of India (CCI) urged the government to
ensure adequate 5G airwaves to be auctioned at affordable rates amid acute financial stress
in the debt-laden telecom sector.

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National Digital Communications Policy

1)Connect India-

 Provide universal broadband connectivity at 50 Mbps to every citizen

 Provide 1 Gbps connectivity to all Gram Panchayats of India by 2020 and 10 Gbps by 2022
 Enable fixed line broadband access to 50% of households

 Achieve ‘unique mobile subscriber density’ of 55 by 2020 and 65 by 2022

 Ensure connectivity to all uncovered areas.

2)Propel India-

 Attract investment worth US$ 100 billion in digital communications sector.

 Increase India’s contribution to global value chain.

 Creation of innovation led start-ups in digital communications sector.

 Train/ re-skill 1 million manpower for building new age skills.

 Accelerate transition to Industry 4.0.

3)Secure India-

 Establish a comprehensive data protection regime for digital communications.

 Ensure net neutrality principles are upheld.

 Develop and deploy robust digital communication network security frameworks.

 Build capacity for security testing and establish appropriate security standards.

 Address security issues relating to encryption and security clearances

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Foreign investment flowing in

 FDI inflows in the telecom sector stood at US$ 37.62 billion from April 2000 to December
2020. In the same period, FDI inflow in the sector accounted for ~7% share of the total FDI
inflows in the country.

 Between April-July 2020, Jio Platforms sold 25.24% stake worth Rs. 1.52 trillion (US$ 21.57
billion) to various global investors in separate deals involving Facebook, Silver Lake, Vista,
General Atlantic, Mubadala, Abu Dhabi Investment Authority, TPG Capital, L. Catterton,
Public Investment Fund, Intel Capital, Qualcomm Ventures and Google. This is the largest
fundraise by any company in the world.

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 Most large players see the PLI scheme in telecom and networking products as a growth
opportunity. In April 2021, the government pointed out that firms such as Ericsson and Nokia
are eager to expand their operations in India and global companies such as Samsung, Cisco,
Ciena and Foxconn have expressed interest to set up their manufacturing base in the country
for telecom and networking products.

 The PLI scheme is expected to bring in investments of about Rs. 3,000 crore (US$ 400.08
million) and generate huge direct and indirect employment.

 In April 2021, Elon Musk’s SpaceX has started accepting pre-orders for the beta version of
its Starlink satellite internet service in India for a fully refundable deposit of US$ 99. Currently,
the Department of Telecommunications (DoT) is screening the move and more developments
will be unveiled soon.

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Opportunities Across Segments in the Industry

1. Increasing mobile subscribers-

• India’s mobile subscriber base is expected to reach 1,420 million by 2024 from 1,200 million
in 2018.

• By 2022, the 4G user base is expected to reach 820 million.

2. Untapped rural markets-

• By January 2021, rural tele density reached 59.50%, up from 43.05% in March 2016.

3. Rising internet penetration-

• Internet penetration is expected to grow steadily and is likely to be bolstered by Government

policy.

• Number of broadband subscribers reached 687.44 million in FY20.

• To encourage cashless economy, Indian Government announced to provide free Wi-Fi to

more than 1,000-gram panchayats.

4. Development of telecom infrastructure-

• TRAI has made several recommendations for the development of telecom infrastructure,
including tax benefits and recognising telecom infrastructure as essential infrastructure.

5. Growth in MVAS-

• Indian Mobile Value-Added Services (MVAS) industry is expected to grow at a CAGR of

18.3% during the forecast period of 2015-2020 and reach US$ 23.8 billion by the end of 2020.It
had grown more than forecasted.

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6. Telecom advertising market-

• According to a Zenith Media survey, India is expected to become the fastest growing telecom
advertisement market, with an annual growth rate of 11% between 2020 and 2023.

7. Growing Cashless Transactions-

• In order to overcome the cash related problems being faced by people, due to demonetisation,
Paytm launched a service through which consumers and merchants can pay and receive money
instantly, without an internet connection.

• Payments on unified payments interface (UPI) hit an all-time high of 2.30 billion (by volume),
with transactions worth ~Rs. 4.31 lakh crore (US$ 59.08 billion) in January 2021.

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Analysis of Survey

A survey was conducted to understand the tendency of customers regarding the Telecom
Operators. To identify which service providers are providing good services and understand
customer satisfaction. The Analysis has been provided below.

1)Occupation of person

Most of the person in survey was users who were student. After that working professional
followed by retired person and Business person.

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Users using the Service providers

Among the survey 52.2% participant uses Reliance Jio than Airtel followed by
VodafoneIdea.No participant using BSNL was found.

Type of connection used by Users.

Participant around 78.3% were using prepaid connection and 18.2% used postpaid
connection.

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Most of users were of Reliance Jio and they were satisfied by the Network Service Provided in
their area.

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100
101
Statement of study

Upcoming 5G service will be interesting and booster for telecom sector growth. The
Infrastructure of Telecom sector will help in better connectivity and increased internet speed.

Reliance Jio Customers were the most satisfied in terms of Vas services, network coverage
followed by Airtel.

Vodafone Idea and BSNL Customers were not satisfied by service provided by their respective
service providers.

According to a Media survey, India is expected to become the fastest growing telecom
advertisement market, with an annual growth rate of 11% between 2020 and 2023.

Limitation of Study

The Response received for survey was less and many participants in survey where students so
their experience differs from old customers.

The latest information according to year 2022 was not available easily so the latest information
was not available.

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Conclusion

Telecom has supported the socioeconomic development of India and has played a significant
role to narrow down the rural-urban digital divide to some extent. It also has helped to increase
the transparency of governance with the introduction of e-governance in India. The government
has pragmatically used modern telecommunication facilities to deliver mass education
programmes for the rural folk of India.

The introduction of 4G Network by Reliance Jio has played a huge role in improving
connectivity and made Internet data available at Cheap rate. Most of Reliance Jio Customers
along with Airtel were satisfied by Service Provided by Respective providers according to the
survey data collected in Report. The 5G Technology is expected to be roll out in India very
soon and this will improve the network coverage and Data speed Quality.

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Glossary

• BWA: Broadband Wireless Access

• CAGR: Compound Annual growth rate

• DoT: Department of Telecommunication

• FDI: Foreign Direct Investment

• FTTH: Fibre to The Home

• FY: Indian Financial Year (April to March)

• IMF: International Monetary Fund

• Rs.: Indian Rupee

• IPTV: Internet Protocol Television

• M&A: Mergers and Acquisitions

• MoU: Minutes of Use per month and per subscriber

• MPEG: Moving Picture Experts Group

• OFC: Optical Fibre Cable

• TRAI: Telecom Regulatory Authority of India

• USOF: Universal Service Obligation Fund

• US$: US Dollar

• VAS: Value-Added Services

• WiMAX: Worldwide Interoperability for Microwave access telecommunications

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https://www.newindianexpress.com/business/2022/jan/11/trai-telecom-sector-agr-grows-424-
injuly-sept-2021
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20in%20Q.E.

https://think.ing.com/articles/telecom-outlook-whats-in-store-for-the-sector-2022/

https://www.ibef.org/download/Telecommunications-May-2021.pdf

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Telecom-Sector-In-India.pdf

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